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The Welfare Effects of Mobile Termination Rate Regulation in Asymmetric Oligopolies: the Case of Spain

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Abstract

We examine the effects of mobile termination rate regulation in asymmetric oligopolies. We do this by extending existing models of asymmetric duopoly and symmetric oligopoly where consumer expectations about market shares are passive. We first calibrate product differentiation parameters using detailed data from the Spanish market from 2010. Next, we predict equilibrium outcomes and welfare effects under alternative scenarios of future termination rates. Lowering termination rates typically lowers profits of all networks and improves consumer and total surplus.

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  • Sjaak Hurkens & Ángel Luis López, 2011. "The Welfare Effects of Mobile Termination Rate Regulation in Asymmetric Oligopolies: the Case of Spain," Working Papers 11-09, NET Institute.
    • Handle: RePEc:net:wpaper:1109
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    Cited by:

    1. Agostini, Claudio A. & Willington, Manuel & Lazcano, Raúl & Saavedra, Eduardo, 2017. "Predation and network based price discrimination in Chile," Telecommunications Policy, Elsevier, vol. 41(9), pages 781-791.
    2. Sobolewski, Maciej & Czajkowski, Mikołaj, 2018. "Receiver benefits and strategic use of call externalities in mobile telephony markets," Information Economics and Policy, Elsevier, vol. 44(C), pages 16-27.
    3. Hurkens, Sjaak & López, Ángel L., 2014. "Who Should Pay for Two-way Interconnection?," IESE Research Papers D/1102, IESE Business School.
    4. Lee, Dongyeol, 2015. "Regulating termination charges in asymmetric oligopolies," Information Economics and Policy, Elsevier, vol. 32(C), pages 16-28.
    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).
    6. Amassaghrou, Soumaya & Gutiérrez-Hita, Carlos & Zhukova, Vita, 2022. "An assessment of the liberalization and the evolution of competition in the Moroccan mobile market," Telecommunications Policy, Elsevier, vol. 46(5).
    7. Katarina Valaskova & Marek Durica & Maria Kovacova & Elena Gregova & George Lazaroiu, 2019. "Oligopolistic Competition among Providers in the Telecommunication Industry: The Case of Slovakia," Administrative Sciences, MDPI, vol. 9(3), pages 1-15, June.
    8. Kryuchkova, Polina, 2013. "Regulation of prices for call termination to network telephone operator: antitrust or tariff regulation?," Ekonomicheskaya Politika / Economic Policy, Russian Presidential Academy of National Economy and Public Administration, pages 126-142, December.
    9. Barth, Anne-Kathrin & Heimeshoff, Ulrich, 2012. "Der angemessene Kostenmaßstab für Terminierungsentgelte - "Pure LRIC" vs. "KeL"," DICE Ordnungspolitische Perspektiven 29, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).

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    More about this item

    Keywords

    Mobile Termination Rates; Network Effects; Simulations; Telecommunications; Welfare;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications

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