Substitution between fixed-line and mobile access: the role of complementarities
Lukasz Grzybowski and
Frank Verboven
Journal of Regulatory Economics, 2016, vol. 49, issue 2, No 1, 113-151
Abstract:
Abstract We study substitution from fixed-line to mobile voice access, and the role of various complementarities that may slow down this process. We use survey data of 160,363 households from 27 EU countries during 2005–2011. We estimate a discrete choice model where households may choose one or both voice technologies, possibly in combination with internet access. We obtain the following main findings. First, there is significant fixed-to-mobile substitution, especially in recent years: without mobile telephony, fixed-line penetration would have been 14.1 % higher at the end of 2011. But there is substantial heterogeneity across households and EU regions, with a stronger substitution in Central and Eastern European countries. Second, the decline in fixed telephony has been slowed down because of a significant complementarity between the fixed-line and mobile connections offered by the fixed-line incumbent operator. This gives the incumbent a possibility to protect its position in the fixed-line market, raising market share by 2.7 %, and to leverage it into the mobile market, raising market share by 5.4 % points. Third, the decline in fixed telephony has also been slowed down because of the complementarity with broadband internet: the introduction of DSL avoided an additional decline in fixed-line penetration of 8.7 % points at the end of 2011. The emergence of fixed broadband has thus been the main source through which incumbents maintain their strong position in the fixed-line network.
Keywords: Fixed-to-mobile substitution; Incumbency advantage; Broadband access (search for similar items in EconPapers)
JEL-codes: L13 L43 L96 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (29)
Downloads: (external link)
http://link.springer.com/10.1007/s11149-015-9290-2 Abstract (text/html)
Access to full text is restricted to subscribers.
Related works:
Working Paper: Substitution between Fixed-line and Mobile Access: the Role of Complementarities (2014) 
Working Paper: Substitution between fixed-line and mobile access: the role of complementarities (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:kap:regeco:v:49:y:2016:i:2:d:10.1007_s11149-015-9290-2
Ordering information: This journal article can be ordered from
http://www.springer. ... on/journal/11149/PS2
DOI: 10.1007/s11149-015-9290-2
Access Statistics for this article
Journal of Regulatory Economics is currently edited by Menaham Spiegel
More articles in Journal of Regulatory Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().