Regulated termination rates and competition among Tunisian mobile network operators. Barriers, bias, and incentives

Safieddine Bouali

Telecommunications Policy, 2017, vol. 41, issue 7, 573-586

Abstract: Since 2006, the Tunisian National Regulatory Authority has been imposing multiannual mobile-to-mobile termination rates, first on the duopoly of Tunisie Télécom and Tunisiana, and then on all three providers once Orange Tunisie entered the market in 2010. This research studies the interplay between interconnection rates for mobile call termination and the retail price competition for prepaid SIM cards, predominantly chosen by Tunisian consumers. We show that the duopoly was practicing “price alignment” for off-net calls, and that subsequently, the third provider entering the market sparked a decisive initial price drop associated with the non-reciprocal rate it enjoyed. However, the price war, which benefited consumers, only occurred when the Regulatory Body eliminated differential tariffs between on and off-net calls in the retail market. It follows that, everything else being equal, an interconnection rate drop alone will not lead to a decrease in retail prices.

JEL-codes: K23 L13 L41 L96 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (1)

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DOI: 10.1016/j.telpol.2017.07.003

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