Competition vs. Regulation in Mobile Telecommunications

Johan Stennek () and Thomas Tangerås ()
Additional contact information
Johan Stennek: Gothenburg University, http://www.stennek.se

No 08-09, Working Papers from NET Institute

Abstract: This paper questions whether competition can replace sector-specific regulation of mobile telecommunications. We show that the monopolistic outcome may prevail independently of market concentration when access prices are determined in bilateral negotiations. A lighthanded regulatory policy can induce effective competition. Call prices are close to the marginal cost if the networks are sufficiently close substitutes. Neither demand nor cost information is required. A unique and symmetric call price equilibrium exists under symmetric access prices, provided that call demand is sufficiently inelastic. Existence encompasses the case of many networks and high network substitutability.

Keywords: network competition; two-way access; mobile termination rates; entry; collusion (search for similar items in EconPapers)
JEL-codes: L12 L14 L51 L96 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2008-09
New Economics Papers: this item is included in nep-com, nep-ind, nep-mic, nep-net and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Competition vs. Regulation in Mobile Telecommunications (2007)
Working Paper: Competition vs. Regulation in Mobile Telecommunications (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:net:wpaper:0809

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