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The effects of lower mobile termination rates in South Africa

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  • Hawthorne, Ryan

Abstract

The effects of a 90% reduction in mobile termination rates (MTRs) are evaluated over the period between 2009 and 2017 in South Africa. Prepaid prices and quality-adjusted postpaid prices declined by over 40%. However, only approximately 30% of the decline in prepaid prices and 60% of the reduction in quality-adjusted postpaid prices can be explained by lower MTR costs. On-net and off-net prepaid prices converged as MTR costs dropped. Regulators concerned about high retail prices and differences between on-net and off-net prices should reduce MTRs.

Suggested Citation

  • Hawthorne, Ryan, 2018. "The effects of lower mobile termination rates in South Africa," Telecommunications Policy, Elsevier, vol. 42(5), pages 374-385.
    • Handle: RePEc:eee:telpol:v:42:y:2018:i:5:p:374-385
    DOI: 10.1016/j.telpol.2018.02.007
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    References listed on IDEAS

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    1. Hawthorne, Ryan & Grzybowski, Lukasz, 2021. "Distribution of the benefits of regulation vs. competition: The case of mobile telephony in South Africa," International Journal of Industrial Organization, Elsevier, vol. 74(C).
    2. Wellmann, Nicolas, 2019. "Hello . . . Are You Still There? An Empirical Analysis How Market Structure Affects Quality of Mobile Networks," VfS Annual Conference 2019 (Leipzig): 30 Years after the Fall of the Berlin Wall - Democracy and Market Economy 203579, Verein für Socialpolitik / German Economic Association.
    3. Ryan Hawthorne & Lukasz Grzybowski, 2019. "Benefits of Regulation vs. Competition Where Inequality Is High: The Case of Mobile Telephony in South Africa," CESifo Working Paper Series 7703, CESifo.
    4. Anthea Paelo & Genna Robb, 2020. "Comparative approaches to key issues in the economic regulation of telecommunications markets in South Africa, Tanzania, Zambia, and Zimbabwe," WIDER Working Paper Series wp-2020-84, World Institute for Development Economic Research (UNU-WIDER).
    5. Hurkens, Sjaak & López, Ángel L., 2021. "Mobile termination rates and retail regimes in Europe and the US: A unified theory of CPP and RPP," Information Economics and Policy, Elsevier, vol. 56(C).

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    More about this item

    Keywords

    Telecommunications; Hedonic regressions; Mobile termination rates;
    All these keywords.

    JEL classification:

    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications

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