National regulatory authorities (NRAs) often face the challenge of achieving their objectives while making the most of limited resources. In smaller nations, this challenge is even more pronounced. Small nation NRAs typically operate with fewer resources, stretched across a wider set of industry sector responsibilities when compared to their counterparts in larger jurisdictions, and they face unique regulatory pressures, including challenges in ensuring independence, managing appeals and navigating outdated legislative frameworks.
To address these challenges, DT Economics collaborated with the International Institute of Communications (IIC) Small Nations Regulators Forum (SNRF) over the course of last year to develop a knowledge library designed to support regulators in small markets. This resource brings together insights from regulators across regions and serves as a tool for SNRF members. It is intended to be updated and expanded over time.
So, what did we uncover? From the wide-ranging responsibilities they manage to the trade-offs they face, we looked at what regulators in small nations are really up against and what can be learned from their experience.
Mapping the telecoms mandates: how we surveyed small nation regulators
To gain a deeper understanding of regulatory effectiveness in small nations, we engaged directly with members of the SNRF through a worldwide survey and follow-up bilateral discussions. Out of 28 NRAs contacted across Europe, Asia, Africa, the Middle East and the Caribbean, six were not in scope for this study, as they did not cover telecommunications in their remit, and 13 NRAs provided responses.
Our survey focused on three key areas: (1) regulatory missions and objectives, (2) the powers and sanctions available to regulators, and (3) the level of operational independence. Structuring the survey around these themes allowed us to uncover both shared challenges and regional differences, providing insights into how NRAs in small nations operate in practice.
The more objectives a regulator has, the harder decision-making becomes, as each decision may advance one goal while potentially undermining another
While our focus was on the telecoms remit of the NRAs surveyed, regulators in smaller countries often have to be a ‘jack of all trades’, overseeing multiple sectors at the same time, such as electricity and water, together with telecommunications. In contrast, larger markets allow for specialisation, with multiple regulators each focusing on individual sectors. This brings up a key consideration for regulators: is a cross-sectoral approach more efficient for small nations? Or can specialisation still deliver more effective regulation in the long term? Exploring these trade-offs is essential for designing effective and sustainable regulatory frameworks.
A balancing act: how small nation regulators manage multiple objectives and appeals
Regulatory objectives are the specific goals that an NRA aims to achieve through its actions, and primary objectives are those considered most critical to fulfilling its mandate. Our survey results showed that European regulators tend to focus on competition, typically identifying just one primary objective, whereas regulators in other parts of the world, such as in Asia and the Caribbean, tend to pursue much broader mandates, encompassing consumer protection, innovation, and investment, often listing four to five primary objectives.
The more objectives a regulator has, the harder decision-making becomes, as each decision may advance one goal while potentially undermining another. Small nations, which often operate with more primary objectives and fewer resources, may face these trade-offs more frequently, making it challenging to strike the right balance. This raises a critical question: do these wide-ranging goals reflect genuine necessity, or do they add unnecessary complexity to regulatory decision-making? This suggests an avenue for further research.
As part of our survey, we also looked at the frequency and success rate of appeals. A robust appeals process (which protects against frivolous legal actions) allows decisions by NRAs to be tested and refined, ensuring they are fair, consistent and well-founded. By providing a mechanism to challenge and improve regulatory actions, appeals help NRAs learn from experience, correct mistakes and ultimately enhance their effectiveness in achieving their mandates.
We gathered information directly from NRAs to capture individual experiences and uncover the specifics of particular appeal cases. Over the past five years, among the NRAs surveyed, Europe recorded 15 appeals, seven of which were successful, while Asia and the Caribbean recorded 21 appeals combined, with only one success.
A robust appeals process can strengthen regulatory decisions by testing and refining them, but it is also resource-intensive and, in some cases, can extend over many years. For small nations, the cost and complexity involved can deter the use of appeals, weakening enforcement and accountability and allowing breaches of the law to go unchecked, ultimately adding to the regulatory burden. Insights from bilateral discussions highlighted that some NRAs are unsure whether they have the necessary resources and capacity to manage large cases. Striking the right balance between maintaining a reliable appeals system and ensuring that the resources to support it are available is therefore crucial.
Powers and sanctions: how NRAs enforce compliance in small nations
Regulators rely on two broad types of powers to carry out their mandates: ex ante powers, which are preventative and focus on setting rules upfront and monitoring compliance, and ex post powers, which are corrective and involve enforcement actions (such as fines) after issues arise.
As part of our work, we found that all NRAs consistently hold ex ante powers, such as issuing licences, collecting fees, and monitoring compliance, while ex post powers, including merger control, market investigations, abuse of dominance and cartel enforcement, vary significantly across regulators. Despite this, our survey showed most NRAs hold both ex ante and ex post powers concurrently. It is probably beneficial to combine them in a single entity in small nations, as the skills required may overlap, allowing regulators to apply their expertise more efficiently, streamline decision-making and reduce administrative costs while maintaining consistency across both preventative and corrective actions.
Sanctions are a key mechanism for regulators to enforce compliance, safeguard competition, uphold transparency and protect consumer confidence. Within the NRAs surveyed, fines emerged as the most frequently used tool, whereas the most severe option – revoking licences – is applied less frequently (of the 13 NRAs surveyed that have these powers, only five have used them). Nevertheless, having a broad menu of options probably acts as a strong deterrent, encouraging firms to comply with regulatory standards. A breakdown of which sanctions are available and how frequently they have been used in the past across the NRAs surveyed can be seen in Figure 1 below.
Figure 1: Sanctions available and used by NRAs surveyed. Source: DT Economics elaboration of survey data
Regulatory independence: balancing autonomy and practicality
Independence allows a regulator to make decisions based on regulatory objectives rather than political or commercial pressures, improving effectiveness and ensuring fair, consistent enforcement. An independent regulator can increase confidence in the overall regulatory framework by providing all players (whether state-owned, dominant or new entrants) with comfort that decisions will be impartial and based on objective criteria.
Measuring independence is subjective and never straightforward, but funding provides one useful proxy. Self-funding is particularly indicative – it suggests an NRA can operate with autonomy and focus on its objectives without undue political or commercial interference. Our survey shows that most regulators cover their own costs, at least in part, through licence or spectrum fees – a clear form of non-government funding – while a few still rely on government grants. Figure 2 shows a breakdown of all the funding sources for the NRAs surveyed.
Figure 2: Count of funding sources of NRAs surveyed. Source: DT Economics elaboration of survey data
While the high reliance on self-funding is a positive sign and signals a degree of independence, in small nations independence is rarely absolute. In these markets, regulators often operate in tightly connected communities, with frequent interaction between government, businesses, and other stakeholders. Close connections like these, combined with limited resources, mean regulators must constantly balance autonomy with the practical need to operate effectively – leaving open the challenge of whether true independence is ever fully attainable in these jurisdictions.
Other issues: legislative challenges in small nations
Despite not being a designated category in our survey, legislative issues emerged in our bilateral discussions as crucial challenges for some NRAs.
One common challenge is that many regulatory frameworks in small nations are outdated, with primary legislation left unchanged for years and struggling to keep pace with new market developments, including the rapid rise of digitalisation. In some cases, legislation is directly replicated from another jurisdiction without adapting it to local market conditions, which can reduce its effectiveness.
In small nations, these challenges are particularly pronounced, highlighting the need for regulators to be adaptable and resourceful in order to maintain effective oversight.
The challenges faced by small nation NRAs are not isolated, but shared. The survey revealed consistent themes, showing that collaboration and knowledge exchange can be powerful levers for strengthening regulatory capacity.
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