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What is the magnitude of fixed–mobile call substitution? Empirical evidence from 16 European countries

Anne-Kathrin Barth and Ulrich Heimeshoff

Telecommunications Policy, 2014, vol. 38, issue 8, 771-782

Abstract: This paper investigates the degree of fixed–mobile call substitution (FMCS) within different European countries. We use quarterly data from 2004 to mid-2010 on 16 mainly Western European countries. By applying dynamic panel data techniques, we are able to estimate short- and long-run elasticities of the telecommunication usage prices on the fixed-line call demand. The own-price and cross-price elasticities found give strong empirical evidence for substitutional effects towards mobile services. In particular, the estimated cross-price elasticities of the mobile price on the fixed-line call demand are relatively large compared to other studies.

Keywords: Dynamic panel model; Fixed–mobile substitution; Telecommunication markets (search for similar items in EconPapers)
Date: 2014
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DOI: 10.1016/j.telpol.2014.04.009

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