Empirical evidence on the relationship between mobile termination rates and firms’ profit

Kjetil Andersson (), Øystein Foros and Bjørn Hansen ()
Additional contact information
Kjetil Andersson: Dept. of Economics and Business Administration, University of Agder, Postal: University of Agder, Department of Economics and Business Administration, Post Box 422, NO-4604 Kristiansand, Norway, http://www.uia.no/en/kk/profile/kjetila
Bjørn Hansen: Telenor Research and Innovation (R&I), Postal: Telenor Research and Innovation (R&I), http://home.bi.no/a0510011/

No 2012/10, Discussion Papers from Norwegian School of Economics, Department of Business and Management Science

Abstract: The comprehensive theoretical literature on mobile termination rates (MTRs) is inconclusive on how the level of MTRs affects overall consumer charges and firms’ profit. In a theoretical model, well suited for econometric implementation, we show that where consumers buy a bundle with included usage, as we now observe in the market, the level of MTRs has no impact on retail prices and firms’ profit. We use a panel data set from saturated European markets and find that an identical change in MTRs does not have a significant impact on firms’ profit.

Keywords: Mobile termination rates; consumer charges; firms’ profit (search for similar items in EconPapers)
JEL-codes: C23 L21 L51 L96 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2012-08-28
New Economics Papers: this item is included in nep-com
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Journal Article: Empirical Evidence on the Relationship between Mobile Termination Rates and Firms' Profits (2016)
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