Substituability between Mobile and Fixed Telephones: Evidence and Implications for India

Muttur Ranganathan Narayana
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Muttur Ranganathan Narayana: Centre for International Research on the Japanese Economy, Faculty of Economics, The University of Tokyo and Centre for Economic Studies and Policy Institute for Social and Economic Change

No CIRJE-F-550, CIRJE F-Series from CIRJE, Faculty of Economics, University of Tokyo

Abstract: Substitutability between mobile and fixed phones is an important consequence of India's telecom sector's deregulation since 1991. This paper tests for substitutability between mobile and fixed phones, based on a binary logit model and using the household sample survey data from the Karnataka State in South India. Estimated cross price elasticity offers empirical evidence for substitutability rather than complementarity between fixed and mobile phone services. This evidence is symmetric in mobile and fixed phone models. The empirical results have implications for on-going policy discussion on subsidization by the Access Deficit Charge and for changing the bases for Universal Service Obligation.

Pages: 36 pages
Date: 2008-05
New Economics Papers: this item is included in nep-cwa and nep-net
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Citations: View citations in EconPapers (6)

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