Telcos

European Telecommunication Regulation - Effects On Telecommunication Providers

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Executive Summary

This paper considers the impact of European telecom regulation on the value of affected companies. Employing a repeating ARGARCH model, the author compares the effect of three types of regulation which are categorized based on the addressed subject, i.e. cross-market, country-specific and company-specific regulation. While standard event study approaches are a special case of ARGARCH models, the approximation process chosen in this paper shows a better estimation of the stock price development based on autoregressive models and, thus, more robust estimation results for the reaction to a regulatory change.

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