The telecommunication sector in Romania

Abstract

With the fall of the Iron Curtain in 1989, Romania started a series of political and economic reforms in order to move from a centralized socialist economy to an economy based on market relations. Romania's transition to a market economy had been protracted and painful due to its legacy of the communist regime, extreme centralization and a high degree of bureaucracy and corruption.Comparing the Romanian and EU telecommunication infrastructure one could find significant differences, which are due to general economic conditions and delayed reforms. The liberalization of telecommunications seems to have had an inappropriate timing in Romania. First of all, it occurred too late, when the mobile telephony boom strongly decreased the interest for fixed line business. Also, liberalization appeared in the context of world telecommunication crisis, which strongly reduced telecom investments and made financing a difficult task. From the beginning of the transition period, Romania has engaged in a rapid opening-up process of its economy, which has resulted, among others, in attracting significant foreign direct investment (FDI). The presence of foreign firms has grown significantly, which is a sign of increasing economic integration.