Access regulation, competition, and the investment of network operators in the mobile telecommunications industry

Introduced in the mobile telecommunications market across world, mobile virtual network operators (MVNOs) are considered an effective way to promote competition. However, possible adverse consequences for infrastructure investment of mobile network operators (MNOs) create concern. In this paper, we investigate the economic effects of NWNOs and the related regulation on MNO investment behavior. Employing firm-level data across 21 Organisation for Economic Co-operation and Development (OECD) countries, we also look at market efficiency to assess empirically the outcomes of MVNOs and regulation. We find that access regulation leads to investment disincentives for MNOs and that volantary provision of access may create disincentives as well. Therefore, to improve both market and dynamic efficiencies, regulation needs to be directed at MNO investment incentives.