A vast empirical literature suggests that the telecommunications industry makes a significant contribution to economic growth (e.g., Röller and Waverman, 2001). 1 According to the theory and many empirical studies, this contribution can depend on the market structure of the telecommunications industry since the market structure can affect, for example, competitive pressure in the industry and therefore the incentives to innovate (e.g., Blundell et al., 1999; Vives, 2008).