Beginning 1980s countries began to recognize the increasingly important role of the telecommunications sector in the economic and social development. This saw developed nations starting to craft policies that could spur competition and inject some dynamism into the sector, spur innovation and enhance availability of services. Prior to liberalization and reforms in telecommunications sector in the 1990, many countries had their telecommunication services provided under monopoly conditions mainly with the government acting as both the operator and the regulator. In the 1990s many countries embarked on the first wave of liberalization by privatizing their national operators. This was followed by the second wave which saw the introduction of new services such as mobile telephony and value added services into the market. The third wave of liberalization introduced full competition by removing exclusivity that had been granted to many incumbent operators. With the full competition in the telecommunications sector, there came the need for regulation in order to protect consumers, supervise industry operators and prevent anti-competitive behaviors, stimulate innovation and investments and create a level playing ground for fair competition. This paper discusses the role of regulation in telecommunications industry.