Fixed-mobile substitution and termination rates

Steffen Hoernig, Marc Bourreau and Carlo Cambini

Telecommunications Policy, 2015, vol. 39, issue 1, 65-76

Abstract: This paper studies the effect of termination rates on the observed substitution between fixed and mobile calls and access, in a model where consumers can subscribe to one or both types of offers. Simulations show that each (fixed or mobile) termination rate has a positive effect on the take-up of the corresponding service, via the waterbed effect, and lowers subscriptions to the other service, via a cost effect. The prevailing asymmetric regulation, with very low fixed and higher mobile termination rates, tends to have implemented the optimal fee structure. However, the interests of the mobile operators and of the different customer groups did not coincide, and this fee structure may have reduced overall market participation.

Keywords: Network competition; Fixed-mobile substitution; Termination rates (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0308596114001943
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Fixed-mobile substitution and termination rates (2015)
Working Paper: Fixed-mobile substitution and termination rates (2014)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:telpol:v:39:y:2015:i:1:p:65-76

Ordering information: This journal article can be ordered from
http://www.elsevier.com/wps/find/journaldescription.cws_home/30471/bibliographic
http://www.elsevier. ... /30471/bibliographic

DOI: 10.1016/j.telpol.2014.12.005

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 Catherine Liu ().