EconPapers    
Economics at your fingertips  
 

Measuring the value of mobile telecommunications networks

Leo Van Hove ()
Additional contact information
Leo Van Hove: Vrije Universiteit Brussel (Free University of Brussels)

Netnomics, 2016, vol. 17, issue 3, 191-222

Abstract: Abstract Fuentelsaz, Garrido and Maicas (2015) propose an “improved” measure of network value for the mobile telecommunications industry. Unfortunately, their measure has multiple issues. For one, it is biased against networks that are small and/or active in small markets. Also, it cannot adequately take into account intertemporal changes in mobile operators’ price discrimination behaviour. Finally, where the functional form of the network effects is concerned, Fuentelsaz et al. invoke Zipf’s law without providing any empirical justification. This paper suggests an alternative for Fuentelsaz et al.’s measure and exploits as yet unused data on on-net discounts to apply it to the cases of Germany and Belgium. It is shown that the alternative measure does not suffer from the same weaknesses as Fuentelsaz et al.’s measure – bar the final one. The paper therefore screens the literature on other network industries in search of an empirical foundation for the network externality assumption. However, the paper finds that the broader literature is also still struggling with this issue.

Keywords: Network value; Network externalities; Telecommunications networks; Metcalfe’s law; Zipf’s law (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
http://link.springer.com/10.1007/s11066-016-9108-0 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
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:kap:netnom:v:17:y:2016:i:3:d:10.1007_s11066-016-9108-0

Ordering information: This journal article can be ordered from
http://www.springer. ... ry/journal/11066/PS2

Access Statistics for this article

Netnomics is currently edited by Stefan Voß

More articles in Netnomics from Springer
Series data maintained by Sonal Shukla ().

 
Page updated 2018-02-15
Handle: RePEc:kap:netnom:v:17:y:2016:i:3:d:10.1007_s11066-016-9108-0