(Static) Non-Cooperative Foreclosing or Collusive Equilibria in the Upstream Roaming Market are Sustainable Even If There Exist More Incumbents : A Model on the Mvnos Entry

The paper proves that (static) non cooperative foreclosing or collusive equilibria in the upstream roaming market are sustainable even if there exist more incumbents. In particular we focus on the complementarity that occurs when an incumbent upstream signs a roaming agreement with a new competitor. The first implication is a clear attitude to implement a less aggressive price war in the downstream market. Moreover, when the incumbents are tacitly coordinated at some foreclosing roaming proposals, the deviator is the only one affected by the downstream complementarity with the entrant and there exists an immediate instrument for punishing the deviator downstream. This attitude is just given by the lack of complementarity. In the first part of the paper we give some evidences that even if exogenous, the entries of new competitors have represented a significative increasing in the diffusion speed of mobile communication service. We propose an Arellano-Bond dynamic panel data estimation on European countries from 1985 to 2003