Regulatory policy can enhance the incentives for investment. There are three main incentives for investment that can be affected by regulation to varying degrees. They are:
- the degree of competition and contestable investment, which will drive investment and innovation;
- the potential for cost efficiencies or cost reduction; and
- the opportunity for service and infrastructure providers to increase revenues, either from new services or new commercial relationships.
There are three main incentives for investment that regulation could affect