Abstract:

This article proposes a political economy analysis of FDI contribution to development of infrastructure sectors, institutions that structured FDI, and timing of FDI by investigating the case of Turkish telecommunications. Article focuses on four historical periods in which foreign investments in Turkish telecommunications were active. The first period is the late Ottoman and early Republican era, when the urban-scale telephone operators were established in İstanbul and İzmir. The second period is the 1980s, when the license agreements with the foreign companies were formed to manufacture digital exchanges in Turkey. The third period is the 1990s, when the private consortiums that include foreign companies were authorized to establish mobile telephone networks. Finally, the fourth period is the 2000s, when the major telecommunications privatizations were finalized. The investigation of these investment projects provides the conclusion that the contribution of FDI to technology transfer and development of networks is dependent to the domestic institutional and political structure that designed FDI, in addition to the timing of the investments. Article’s focus of research, which is on the long-term of FDI in telecommunications from nineteenth century to twenty-first century, is an original contribution to both FDI and telecommunications policy literatures. Purpose: Aim of the research is to evaluate FDI in Turkish telecommunications in terms of timing, institutional structure, and network development. Method: Article employs qualitative research methods. Findings: I conclude that the timings of the foreign investments coincided with the wars and crises that depressed international financial markets. The performances of FDI projects in terms of technology transfer and network development varied due to the quality of institutions that welcomes and redirects FDI. An overall evaluation concludes that the contribution of FDI to network development is severely limited. Originality: Article’s focus of research, which is on the long-term of FDI in telecommunications from nineteenth century to twenty-first century, is an original contribution to both FDI and telecommunications policy literatures.

Keywords: