Mobile Phone Termination Charges with Asymmetric Regulation

Pio Baake and Kay Mitusch

No 500, Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research

Abstract: We model competition between two unregulated mobile phone companies with price-elastic demand and less than full market coverage. We also assume that there is a regulated full-coverage fixed network. In order to induce stronger competition, mobile companies could have an incentive to raise their reciprocal mobile-to-mobile access charges above the marginal costs of termination. Stronger competition leads to an increase of the mobiles' market shares, with the advantage that (genuine) network effects are strengthened. Therefore, 'collusion' may well be in line with social welfare.

Keywords: Telecommunication; Mobile phones; Mobile-to-mobile access charges; Network effects (search for similar items in EconPapers)
JEL-codes: L41 L96 (search for similar items in EconPapers)
Pages: 23 p.
Date: 2005
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Mobile phone termination charges with asymmetric regulation (2009)
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