Fixed-Mobile Substitution in MENA Countries: The Future of Fixed-Line Markets

Ezzat Riham Ahmed ()
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Ezzat Riham Ahmed: Assistant Professor, Economics Department, Faculty of Economics and Political Science, Cairo University, Giza, Egypt

Review of Network Economics, 2017, vol. 16, issue 4, 387-417

Abstract: The aim of this paper is to study the occurrence of Fixed-Mobile Substitution (FMS) in the Middle East North African (MENA) region. While there have been many studies on developed countries, empirical evidence for developing countries is somehow limited. In the last few years, mobile cellular subscriptions achieved a tremendous growth across the MENA region making it the second fastest growing region in the world in terms of mobile subscriptions in 2012, and the fastest growing region in terms of mobile traffic in 2014. Fixed subscriptions have also grown but at a slower rate than mobile subscriptions. Using unbalanced data on 17 MENA countries over the period 1990–2009, we explore the relationship between fixed and mobile telephone services by using dynamic panel data models. We find empirical evidence for asymmetric one-way substitution between fixed-lines and mobile phones and we estimate own- and cross-price elasticities for fixed and mobile telephone services in MENA region. The results are then used to derive policy implications in terms of market redefinition, taxation policies, extension of universal services and broadband markets.

Keywords: fixed-mobile substitution; MENA region; regulation; telecom industry (search for similar items in EconPapers)
JEL-codes: C23 L43 L51 L96 O50 (search for similar items in EconPapers)
Date: 2017
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DOI: 10.1515/rne-2017-0013

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