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Research Article

The Designation Criteria of Eligible Areas of Universal Service Subsidy

JUNG,HOON

Korea Information Society Development Institute

Published: January 2017 · Vol. 21, No. 3 · pp. 193-206
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Abstract

In the age of monopoly telecommunications market, monopoly operators would provided universal service through cross subsidy. But from the early 2000s the privatization and competition are introduced in telecommunications market and monopoly operators did not exist any more from that time. Thus universal service regime is introduced to provide basic communication services. Hasbi(2015) argues that universal service is one of the cores of the liberalization of the telecommunications industry. This study explores the process of PNLA(Potential Net Loss Area) delegation. Specifically, this study investigates the delegation criteria of eligible area of universal service subsidy. The results of this study contribute to improve the universal service regime and to suggest the way which can provide users for the stable and sustainable universal service. This study has differentiations which suggest the improved alternative of universal service and use the actual data of universal service area. The results of the analysis are as follows. First, profit per line and cost ratio are negatively related consistently for sample period. Second, profit per line and cost per line are negatively related consistently for sample period. Third, profit per line and the number of lines are positively related only in 2007. For the rest of sample year, profit per line and the number of lines are not related. Finally, profit per line and population density are positively related in 2007 and 2008. For the rest of sample year, profit per line and population density are not related. Conclusively, cost ratio and cost per line are still the effective criteria of PNLA designation. but the number of lines and population density are not the effective criteria of PNLA designation.
Keywords: universal serviceuniversal service subsidyPNLA(Potential Net Loss Area)