Telecommunication and information technology experienced significant improvement since the 1980?s. Consequently, this technology advancement enables the diversification of communication service provision. As the numbers of consumers and telecommunication products are rapidly increasing, a single company could no longer provide telecommunication service efficiently. To improve the provision and the quality of telecommunication services, many countries started to liberalize their telecommunication industry. Taiwan government started the deregulation on telecommunication industry on August 8th, 1987. The telecommunication service that was once monopolized by Chung-Hwa Telecom Ltd is now open for competition. Immediate results following the entry of competitive firms into the industry include more product choices and cheaper rates. To improve it?s efficiency and therefore it?s competitiveness, Chung-Hwa Telecom Ltd started its privatization process since July 1st, 1996. The purpose of this study is to investigate the impact of liberalization/privatization sequencing on efficiency in the telecommunication industry. Using data published by the ITU (International Telecommunication Union), this study found that: 1. Liberalization/privatization sequence is more conducive to the promotion of efficiency than privatization/liberalization sequence. 2. Percentage of shares sold to the private sector also played a significant role in improving efficiency. 3. Foreign participation in the privatization process has no significant impact on efficiency in the short run.
