Remarks on the Economic Implications of Convergence

Convergence means different things to different people. This paper discusses two ways in which convergence is generally discussed: (i) the convergence of voice, video and data in telecommunications markets: and (ii) the convergence of the telecommunications and computer industries. In order to understand what types of new services will be offered and how industry structure will evolve, it is also necessary to understand the drivers of convergence. Although technological change has played a key role, it is just as important to emphasize other forces, such as regulatory factors. Finally, while some aspects of convergence should lead to increased competition, others may not.