Dialog Axiata Archives — LIRNEasia

Presented at FreelancerSL 2.0 Dialog Auditorium 23 October 2016

Profits and investment

Posted on February 11, 2011  /  1 Comments

In most countries in the early stages of liberalization, I get asked about the profits operators make and how they should be monitored. I tend to say that the priority should be on monitoring investments (not committed, but actually made) and that it’s not a bad idea for the regulator to have some knowledge about profits. The reason I give priority to investment is because that is what drives performance. If investment declines, the regulator can expect problems. Profits are relevant for two reasons: first, if they are below the norm (more on this below), investments will most likely be affected negatively.