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On the telecommunication markets, even if competition intensifies, customers are often bounded by switching costs. Customers may face monetary switching costs: the most typical example is loyalty commitments. Additionally, transaction costs, such as managing the switching itself, differences in auxiliary services and access to the help desk may make switching costly. Increasing switching costs is a strategic measure for operators with a dominant position, thus information on them is necessary when analysing competition. However, under specific conditions switching costs do not restrict competition (NERA 2003). Subsequently we briefly review the basic model of markets with switching costs and their implications on telecommunications regulation. Next we present the elements that constitute switching costs and review the existing methods of estimating switching costs.