EconPapers    
Economics at your fingertips  
 

Mobile termination and mobile penetration

Sjaak Hurkens and Doh-Shin Jeon ()

No D/816, IESE Research Papers from IESE Business School

Abstract: In this paper, we study how access pricing affects network competition when subscription demand is elastic and each network uses non-linear prices and can apply termination-based price discrimination. In the case of a fixed per minute termination charge, we find that a reduction of the termination charge below cost has two oppos- ing effects: it softens competition but helps to internalize network externalities. The former reduces mobile penetration while the latter boosts it. We find that firms al- ways prefer termination charge below cost for either motive while the regulator prefers termination below cost only when this boosts penetration. Next, we consider the retail benchmarking approach (Jeon and Hurkens, 2008)that determines termination charges as a function of retail prices and show that this approach allows the regulator to increase penetration without distorting call volumes.

Keywords: Mobile Penetration; Termination Charge; Access Pricing; Networks; Interconnection; Regulation; Telecommunications (search for similar items in EconPapers)
JEL-codes: K23 L51 L96 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2009-09-01
New Economics Papers: this item is included in nep-com, nep-law, nep-net and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://www.iese.edu/research/pdfs/DI-0816-E.pdf (application/pdf)

Related works:
Working Paper: Mobile Termination and Mobile Penetration (2009) Downloads
Working Paper: Mobile Termination and Mobile Penetration (2009) Downloads
Working Paper: Mobile Termination and Mobile Penetration (2009) Downloads
Working Paper: Mobile Termination and Mobile Penetration (2009) Downloads
Working Paper: Mobile termination and mobile penetration (2009) Downloads
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:ebg:iesewp:d-0816

Access Statistics for this paper

More papers in IESE Research Papers from IESE Business School IESE Business School, Av Pearson 21, 08034 Barcelona, SPAIN. Contact information at EDIRC.
Bibliographic data for series maintained by Noelia Romero ().

 
Page updated 2024-05-14
Handle: RePEc:ebg:iesewp:d-0816