Mobile Phone Termination Charges with Asymmetric Regulation

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.

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Year of publication:	2005
Authors:	Baake, Pio ; Mitusch, Kay
Institutions:	DIW Berlin (Deutsches Institut für Wirtschaftsforschung)
Subject:	Telecommunication \| Mobile phones \| Mobile-to-mobile access charges \| Network effects

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Extent:	application/pdf
Series:	Discussion Papers of DIW Berlin. - ISSN 1619-4535.
Type of publication:	Book / Working Paper
Language:	English
Notes:	Number 500 23 pages long
Classification:	L41 - Monopolization; Horizontal Anticompetitive Practices ; L96 - Telecommunications
Source:	RePEc - Research Papers in Economics