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Indirect access to mobile networks: economic effects and policy implications

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  • B. -W. Kim
  • S. -H. Seol
  • D. -H. Lee

Abstract

This study investigates the economic effects that may be expected from the introduction of an indirect access (IA) scheme, a potentially effective tool for stimulating competition, into Korea's mobile market. We estimate the changes in consumer surplus and operator's net revenues attributable to the IA system, using actual or estimated market data such as the price elasticity, call traffics, prices and interconnection charges, combined with some competition scenarios. Our results suggest that the increase of consumer surplus by the introduction of an IA scheme would be sizeable, regardless of its type and that is largest under the scheme access charge is regulated on cost-plus basis and mandated for Significant Market Power (SMP) only to provide interconnection service if IA providers (IAP) request.

Suggested Citation

  • B. -W. Kim & S. -H. Seol & D. -H. Lee, 2011. "Indirect access to mobile networks: economic effects and policy implications," Applied Economics Letters, Taylor & Francis Journals, vol. 18(4), pages 377-381.
    • Handle: RePEc:taf:apeclt:v:18:y:2011:i:4:p:377-381
    DOI: 10.1080/13504851003670593
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    Cited by:

    1. Kim, Byung Woon & Park, Joonho & Youl Ko, Chang, 2013. "Cost allocation of WCDMA and wholesale pricing for mVoIP and data services," Telecommunications Policy, Elsevier, vol. 37(1), pages 35-47.

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