Quality Competition in Mobile Telecommunications : Evidence from Connecticut

To understand how consolidation impacts quality provision, I estimate demand and supply of the signal quality of wireless telephony using a proprietary survey and a unique database of antenna facilities, or base stations. Using local land use regulation as an instrument, I find a 1% increase in log base station density results in a median gain of 0.17% of the market and a median loss of 0.04% for each rival. Counterfactual acquisitions of T-Mobile under various assumptions are consistent with previous findings and reveal that network integration is an important but limited factor in the merger's consumer welfare implications