Competition in network industries: Evidence from the Rwandan mobile phone network

Daniel Björkegren

RAND Journal of Economics, 2022, vol. 53, issue 1, 200-225

Abstract: This article analyzes the potential for competition policy to affect welfare and investment in a network industry. When a network is split between competitors, each internalizes less network effects, but may still invest to steal customers. I structurally estimate consumers' utility from adopting and using mobile phones, with transaction data from nearly the entire Rwandan network. I simulate the equilibrium choices of consumers and network operators. Adding a competitor earlier could have reduced prices and increased incentives to invest in rural towers, increasing welfare by the equivalent of 1% of GDP. However, forcing free interconnection can lower incentives to invest.

Date: 2022
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Citations: View citations in EconPapers (3)

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https://doi.org/10.1111/1756-2171.12405

Related works:
Working Paper: Competition in Network Industries: Evidence from the Rwandan Mobile Phone Network (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:bla:randje:v:53:y:2022:i:1:p:200-225

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