 More firms, more competition? The case of the fourth operator in France's mobile phone marketInternational Journal of Production Economics, 2011, vol. 130, issue 2, 186-195 Abstract: To foster competition the French government authorized a fourth operator, 'Free', to enter the country's mobile phone market at the end of 2009 alongside Orange, SFR and Bouygues Telecom (BT), who held, respectively, one-half, one-third and one-sixth of the market. By using a stylized model of France's phone market, we have examined what we call the regulator's nightmares and dreams. If Cournot competition is in place before Free's entry, minimizing the total profit fails to maximize the consumer surplus and the total surplus; the maximum most realistic price fall is 6.7% compared to three-way competition and could be 1.7% only; if Orange, SFR and Bouygues Telecom extend competition to Free, this situation will be sustainable. If Orange, SFR and Bouygues Telecom are in monopolistic cartel, an extension to a monopolistic cartel of four or a switching to four-way Cournot competition are equally unlikely; Free will take place in Orange, SFR and Bouygues Telecom's competitive fringe, which is not so bad for the regulator but Orange's incentives will push to four-way competition. Keywords: Mobile; phone; New; operator; Entry; GSM; 3G; Cartel (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:proeco:v:130:y:2011:i:2:p:186-195 Access Statistics for this article International Journal of Production Economics is currently edited by Stefan Minner More articles in International Journal of Production Economics from Elsevier |
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