Abstract: The incentive regulation should play an important role for the telecom operators and promote the development of telecom industry, but this brings forth a question: how to increase efficiency. In this paper, the incentive schemes with high and low efficiency and their applications are discussed, and the factors which affect the incentive effect are put forward in order to offer some suggestions for setting up the incentive scheme which is more beneficial to the development of telecom industry.

Key words: telecomregulation, incentiveregulation, efficiency, telecomcompetition