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Are main lines and mobile phones substitutes or complements? Evidence from Africa

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  • Hamilton, Jacqueline

Abstract

Many developed and developing countries have approached telecommunications reform by opening the market for mobile telephones to private participation and competition. One result of this strategy is the astounding worldwide growth in mobile communications, with developing countries accounting for the fastest growth. It is believed that mobile phones are complementary to fixed-line telephony in developed countries, but they appear to be substitutes for main lines in developing regions where access is low or non-existent. This paper examines the relationship between mobile and main-line telephones by accounting for reverse causality between them in an environment with low levels of development. The results suggest that mobile telephones act as a competitive force encouraging fixed-line providers to improve access. It is possible that mobile and main lines are sometimes substitutes, and at other times complements in consumption, even where fixed-line access is low.

Suggested Citation

  • Hamilton, Jacqueline, 0. "Are main lines and mobile phones substitutes or complements? Evidence from Africa," Telecommunications Policy, Elsevier, vol. 27(1-2), pages 109-133, February.
    • Handle: RePEc:eee:telpol:v:27:y::i:1-2:p:109-133
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    Citations

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    Cited by:

    1. Barth, Anne-Kathrin & Heimeshoff, Ulrich, 2012. "How large is the magnitude of fixed-mobile call substitution? Empirical evidence from 16 European countries," DICE Discussion Papers 49, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    2. Ricardo Ribeiro & João Vareda, 2007. "Crowding Out or Complementarity in the Telecommunications Market?," Working Papers 07-33, NET Institute, revised Sep 2007.
    3. McDonough, Carol C., 2013. "Consumer demand for fixed and mobile broadband," 24th European Regional ITS Conference, Florence 2013 88485, International Telecommunications Society (ITS).
    4. Barth, Anne-Kathrin & Heimeshoff, Ulrich, 2011. "Does the growth of mobile markets cause the demise of fixed networks? Evidence from the European Union," 22nd European Regional ITS Conference, Budapest 2011: Innovative ICT Applications - Emerging Regulatory, Economic and Policy Issues 52144, International Telecommunications Society (ITS).
    5. Ramachander, Sangamitra, 2016. "The price sensitivity of mobile use among low income households in six countries of Asia," Telecommunications Policy, Elsevier, vol. 40(7), pages 673-691.
    6. Symeou, Pavlos C. & Pollitt, Michael G., 2014. "Fixed voice telephony in economies of different sizes: When industry policy meets technological change," Technological Forecasting and Social Change, Elsevier, vol. 86(C), pages 273-286.
    7. Ward, Michael R. & Zheng, Shilin, 2016. "Mobile telecommunications service and economic growth: Evidence from China," Telecommunications Policy, Elsevier, vol. 40(2), pages 89-101.
    8. Barth, Anne-Kathrin & Heimeshoff, Ulrich, 2014. "What is the magnitude of fixed–mobile call substitution? Empirical evidence from 16 European countries," Telecommunications Policy, Elsevier, vol. 38(8), pages 771-782.
    9. Andonova, Veneta & Diaz-Serrano, Luis, 2009. "Political institutions and telecommunications," Journal of Development Economics, Elsevier, vol. 89(1), pages 77-83, May.
    10. Jonathan Donner & Marcela X. Escobari, 2010. "A review of evidence on mobile use by micro and small enterprises in developing countries," Journal of International Development, John Wiley & Sons, Ltd., vol. 22(5), pages 641-658.
    11. Karamti, Chiraz, 2019. "Lopsided effects of telecom reforms on mobile markets in the enlarged EU: Evidence from dynamic quantile model," Telecommunications Policy, Elsevier, vol. 43(3), pages 238-261.
    12. Vogelsang, Ingo, 2010. "The relationship between mobile and fixed-line communications: A survey," Information Economics and Policy, Elsevier, vol. 22(1), pages 4-17, March.
    13. Ward, Michael R. & Zheng, Shilin, 2014. "Mobile telecommunications infrastructure and economic growth: Evidence from China," 25th European Regional ITS Conference, Brussels 2014 101405, International Telecommunications Society (ITS).
    14. Ghosh, Saibal, 2016. "Does mobile telephony spur growth? Evidence from Indian states," Telecommunications Policy, Elsevier, vol. 40(10), pages 1020-1031.
    15. Wolfgang Briglauer & Anton Schwarz & Christine Zulehner, 2011. "Is fixed-mobile substitution strong enough to de-regulate fixed voice telephony? Evidence from the Austrian markets," Journal of Regulatory Economics, Springer, vol. 39(1), pages 50-67, February.
    16. Ward, Michael R. & Zheng, Shilin, 2012. "Mobile and fixed substitution for telephone service in China," Telecommunications Policy, Elsevier, vol. 36(4), pages 301-310.

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