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Telecom: Advantage, France and Germany
Pushed mainly by advances in the mobile-telephone sector, the productivity of the French and German telecommunications industries rose strongly in the late 1990s. By the end of the decade, German productivity had even surpassed US levels. Although further gains are likely as data communications services improve, each of the three countries examined in this McKinsey Global Institute study faces a different challenge to push telecom productivity ahead.
The take-away: In Germany, mobile-telephone players must stimulate demand, while French operators must increase traffic over fixed lines. In the United States, regulators should let the mobile-phone industry consolidate.
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