Market Structure, Investment and Technical Efficiencies in Mobile Telecommunications

Marc Ivaldi, Jonathan Elliott, Georges Vivien Houngbonon and Paul Scott

No 16111, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We develop a model of competition in prices and infrastructural investment among mobile network providers. Market shares and service quality (download speed) are simultaneously determined, for demand affects the network load just as delivered quality affects consumer demand. While consolidation typically has adverse impacts on consumer surplus, economies of scale (which we derive from physical principles) push in the other direction, and we find that consumer surplus is maximized at a moderate number of firms, and that the optimal number of firms is higher for lower income consumers. Our modeling framework allows us to quantify the marginal social value of allocating more spectrum to mobile telecommunications, finding it is roughly five times an individual firm’s willingness to pay for a marginal unit of spectrum.

Keywords: Mobile telecommunications; Market structure; Infrastructure; Scale efficiency; Antitrust policy; Endogenous quality; Queuing (search for similar items in EconPapers)
JEL-codes: D21 D22 L13 L40 (search for similar items in EconPapers)
Date: 2021-05
References: Add references at CitEc
Citations:

Downloads: (external link)
https://cepr.org/publications/DP16111 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Working Paper: Market Structure, Investment and Technical Efficiencies in Mobile Telecommunications (2024)
Working Paper: Market Structure, Investment and Technical Efficiencies in Mobile Telecommunications (2024)
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:cpr:ceprdp:16111

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP16111

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().