Mobile Call Termination

Mark Armstrong () and Julian Wright ()

MPRA Paper from University Library of Munich, Germany

Abstract: Motivated by recent UK experience, we study the problem of mobile call termination. This is an intriguing policy story, in which regulation has been imposed on what appears to be a competitive industry. We introduce a framework which integrates two existing literatures: one analyzing calls from the fixed network to mobile networks (where the predicted market failure involves the termination charge being set at the monopoly level), and one analyzing calls from one mobile network to another (where the predicted unregulated termination charge lies below the efficient level). Our unified framework allows us to consider the impact of wholesale arbitrage and demand-side substitution. In the absence of very significant market expansion possibilities, we find the unregulated termination charge lies between the efficient and the monopoly benchmarks. There remains a rationale for regulation, albeit reduced relative to the earlier literature.

Keywords: Regulation; Mobile telephony; Oligopoly; Two-sided markets (search for similar items in EconPapers)
JEL-codes: L51 L96 D43 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com, nep-mic, nep-net and nep-reg
Date: 2008-07
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Downloads: (external link)
http://mpra.ub.uni-muenchen.de/2344/ orginal version
http://mpra.ub.uni-muenchen.de/4858/ revised version
http://mpra.ub.uni-muenchen.de/9866/ revised version

Related works:
Journal Article: Mobile Call Termination (2009)
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Persistent link: http://EconPapers.repec.org/RePEc:pra:mprapa:2344

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