Service quality in utility industries: the European telecommunications sector

Abstract

Purpose – The purpose of this paper is to analyse the economic and technological factors that determine the quality of European telecommunications services. The paper test whether the privatisation, the efficiency and the labour factor of telecommunications operators are determinants of service quality and whether competition, technology and infrastructure investment in the telecommunications sector influence that quality. Design/methodology/approach – The paper use the panel data methodology to analyse the factors that determine the quality of service of telecommunications. Findings – The results indicate that the more efficient the company is, the more quality it will deliver. However, the paper finds no evidence that the privatisation and the restructuring of the labour force of the main telecommunications operators, or the competition, technology and investments in the sector, lead to greater quality. Practical implications – In order to foster higher quality, effective market competitiveness has to be established to avoid benefitting the incumbent company and to make the development of competition possible in the long run. Originality/value – Although previous literature assumes a positive relationship between the performance of privatised companies and quality, this study shows that the privatisation and liberalisation processes do not bring about quality improvements by themselves. The research finds that the efficiency of privatised companies is the primary source of quality.