NATURAL MONOPOLIES' ADAPTATION TO TECHNOLOGICAL CHANGES AND DIGITALIZATION

Abstract

The main purpose of the study is to systematically analyze the impact of technological changes and digitalization on the functioning, economic efficiency, and regulatory mechanisms of natural monopolies. The article examines how digital platforms, automation, and data-driven management technologies transform the traditional dominant positions of natural monopolies and influence the competitive environment and institutional mechanisms. The research is based on theoretical analysis, a systemic approach, comparative historical analysis, and empirical observation methods. Using examples from the Swedish telecommunications sector and the utility and energy sectors of Azerbaijan, the dynamics of operational costs, service quality, and management efficiency resulting from the application of digital technologies are evaluated. The findings demonstrate that digitalization leads to a reduction in technical losses, shorter service delivery times, and increased flexibility of regulatory mechanisms. At the same time, digital management tools enhance the effectiveness of regulatory oversight and accelerate decision-making processes by increasing data transparency. The scientific novelty of the study lies in substantiating digitalization not only as a technological innovation but also as a tool of institutional transformation for natural monopolies. The practical significance of the research is related to identifying opportunities for improving decision-making processes for regulatory institutions and infrastructure sectors.