Merger simulation using average market share: An application to the Optimus-TMN mobile merger case
Corrado Andini () and
Telecommunications Policy, 2011, vol. 35, issue 1, 36-50
This paper develops a new merger simulation methodology based on the analysis of the performance change of a hypothetical firm with average market share. It applies the methodology to the Optimus-TMN mobile telecom merger case in Portugal, within the context of the December 2006 decision by the Portuguese Competition Authority to authorize the merger between their respective parent companies, Sonaecom and Portugal Telecom. The results suggest that the Optimus-TMN merger would have resulted in 3.8% higher prices and 14.9% lower marginal costs, and would have been welfare-enhancing. These findings attest to the importance of the "efficiency defense" hypothesis of mergers. They suggest that competition authorities are warranted in allowing further consolidation in the telecom sector, but that consolidation should be accompanied by strict retail price-cap regulation.
Keywords: Telecommunications; Merger; Welfare; analysis (search for similar items in EconPapers)
References: Add references at CitEc
Citations View citations in EconPapers (2) Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:telpol:v:35:y:2011:i:1:p:36-50
Ordering information: This journal article can be ordered from
http://www.elsevier. ... /30471/bibliographic
Access Statistics for this article
Telecommunications Policy is currently edited by Erik Bohlin
More articles in Telecommunications Policy from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().