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International telephone traffic, callback and policy implications

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  • Sandbach, Jonathan

Abstract

This paper uses an origin/destination model of international traffic flows, incorporating linear and non-linear price variables, to identify the impact of callback arbitrage opportunities on traffic flows. The model also incorporates a number of structural drivers of international telephone traffic that are of interest in themselves. The conclusion is that there is some evidence for the effect of callback when (and only when) arbitrage opportunities on a route exceed a certain threshold (about US$0.90 per minute). This would explain the considerable migration of traffic to callback operators in some countries with very high international call tariffs. However, the current Impact on Western European traffic is minimal. Furthermore, as the real price of international telephone calls falls, even current arbitrage opportunities will soon cease to be attractive to traditional callback operators.

Suggested Citation

  • Sandbach, Jonathan, 1996. "International telephone traffic, callback and policy implications," Telecommunications Policy, Elsevier, vol. 20(7), pages 507-515, August.
    • Handle: RePEc:eee:telpol:v:20:y:1996:i:7:p:507-515
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    Cited by:

    1. Basalisco, Bruno, 2012. "The effect of user interaction on the demand for mobile text messages: Evidence from cross-country data," Information Economics and Policy, Elsevier, vol. 24(2), pages 132-144.
    2. Mayo, John W. & Ukhaneva, Olga, 2017. "International telecommunications demand," Information Economics and Policy, Elsevier, vol. 39(C), pages 26-35.
    3. Francesco Castelli & José Luis Gómez Barroso & Claudio Leporelli, 2000. "Global Universal Service and International Settlement Reform," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 69(4), pages 679-694.
    4. Agiakloglou, Christos & Karkalakos, Sotiris, 2006. "Estimating Diffusion Rates for Telecommunications: Evidence from European Union," MPRA Paper 45862, University Library of Munich, Germany.
    5. Wen-Chung Guo & Fu-Chuan Lai & Chorng-Jian Liu & Chao-Cheng Mai, 2012. "Symbiotic Production and Downstream Market Competition," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 40(3), pages 329-340, September.
    6. Agiakloglou, Christos & Karkalakos, Sotiris, 2006. "Estimating Diffusion Rates for Telecommunications: Evidence from European Union," MPRA Paper 45788, University Library of Munich, Germany.
    7. Gyimah-Brempong, Kwabena & Karikari, John Agyei, 2002. "Cost shifting in international telephone calls between US and African countries," Journal of Development Economics, Elsevier, vol. 68(2), pages 455-477, August.
    8. Christos Agiakloglou & Demetrius Yannelis, 2006. "Estimation of Price Elasticities for International Telecommunications Demand," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 12(1), pages 131-137, February.

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