Short-term Relationship between Mobile Phone Rates per Rounded Minute and per Second

Eduardo Martínez Chombo () and Salvador Flores Santillán ()
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Eduardo Martínez Chombo: Director General de Proyectos de Resoluciones y Acuerdos “B”, Comisión Federal de Telecomunicaciones (COFETEL). México, D.F. Mexico.
Salvador Flores Santillán: Asesor del Comisionado “B”, Comisión Federal de Telecomunicaciones (COFETEL). México, D.F. Mexico.

Economía Mexicana NUEVA ÉPOCA, 2013, vol. XXII, issue 3, Cierre de época (I), 319-331

Abstract: We developed a model to analyze the short term relationship between mobile phone charges per rounded minute and per second, in a context where tariffs are freely determined. We assumed profit maximizing firms and an exponential distribution for mobile call duration. Among the results, we found that charges per second are significantly greater than charges per rounded minute, and lower average call duration is related to a greater difference between rates. The results of the model, calibrated with OECD estimates, are consistent with empirical evidence.

Keywords: telecommunications; mobile telephony; mobile pricing; exponential distribution. (search for similar items in EconPapers)
JEL-codes: L11 L96 (search for similar items in EconPapers)
Date: 2013
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