IDEAS home Printed from https://ideas.repec.org/p/tse/wpaper/125551.html
   My bibliography  Save this paper

Market Structure, Investment and Technical Efficiencies in Mobile Telecommunications

Author

Listed:
  • Elliott, Jonathan
  • Houngbonon, Georges Vivien
  • Ivaldi, Marc
  • Scott, Paul

Abstract

We develop a model of competition in prices and infrastructure among mobile network operators. Although consolidation increases market power, it can lead to more efficient data transmission due to economies of scale, which we derive from physical principles. After estimating our model with French consumer and infrastructure data, equilibrium simulations reveal that while prices decrease with the number of firms, so do download speeds. Our framework also allows us to quantify the impact of spectrum allocation. The marginal social value of spectrum exceeds firms’ willingness to pay in our model as well as observed prices in spectrum auctions.

Suggested Citation

  • Elliott, Jonathan & Houngbonon, Georges Vivien & Ivaldi, Marc & Scott, Paul, 2021. "Market Structure, Investment and Technical Efficiencies in Mobile Telecommunications," TSE Working Papers 21-1207, Toulouse School of Economics (TSE), revised 26 Jun 2024.
    • Handle: RePEc:tse:wpaper:125551
    as

    Download full text from publisher

    File URL: https://www.tse-fr.eu/sites/default/files/TSE/documents/doc/wp/2021/wp_tse_1207.pdf
    File Function: Working paper
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Mulligan, James G, 1983. "The Economies of Massed Reserves," American Economic Review, American Economic Association, vol. 73(4), pages 725-734, September.
    2. Verboven, Frank & Bourreau, Marc & Sun, Yutec, 2018. "Market Entry, Fighting Brands and Tacit Collusion: The Case of the French Mobile Telecommunications Market," CEPR Discussion Papers 12866, C.E.P.R. Discussion Papers.
    3. Joseph Cullen & Nicolas Schutz & Oleksandr Shcherbakov, 2020. "Welfare Analysis of Equilibria With and Without Early Termination Fees in the US Wireless Industry," Staff Working Papers 20-9, Bank of Canada.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Michele Fioretti & Junnan He & Jorge Tamayo, 2024. "Prices and Concentration: A U-Shape? Theory and Evidence from Renewables," Working Papers hal-04631762, HAL.
    2. Marcoux, Mathieu, 2022. "Strategic interactions in mobile network investment with a new entrant and unobserved heterogeneity," International Journal of Industrial Organization, Elsevier, vol. 82(C).
    3. Marc Bourreau & Yutec Sun, 2022. "Competition and Quality: Evidence from the Entry of Mobile Network Service," Working Papers 22-04, NET Institute.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ale-Chilet, Jorge & Chen, Cuicui & Li, Jing & Reynaert, Mathias, 2021. "Colluding Against Environmental Regulation," TSE Working Papers 21-1204, Toulouse School of Economics (TSE).
    2. Ambre Nicolle & Lukasz Grzybowski & Christine Zulehner, 2018. "Impact Of Competition, Investment, And Regulation On Prices Of Mobile Services: Evidence From France," Economic Inquiry, Western Economic Association International, vol. 56(2), pages 1322-1345, April.
    3. Mulligan, James G. & Hoffman, Saul D., 1998. "Daycare Quality and Regulation: A Queuing-Theoretic Approach," Economics of Education Review, Elsevier, vol. 17(1), pages 1-13, February.
    4. Christos Genakos & Tommaso Valletti & Frank Verboven, 2018. "Evaluating market consolidation in mobile communications," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 33(93), pages 45-100.
    5. James G. Mulligan & Nilotpal Das, 2004. "Vintage Effects and the Diffusion of Time-Saving Technological Innovations: The Adoption of Optical Scanners by U.S. Supermarkets."," Working Papers 04-06, University of Delaware, Department of Economics.
    6. Berne, Michel & Vialle, Pierre & Whalley, Jason, 2019. "An analysis of the disruptive impact of the entry of Free Mobile into the French mobile telecommunications market," Telecommunications Policy, Elsevier, vol. 43(3), pages 262-277.
    7. Genakos, Christos & Kretschmer, Tobias & Nicolle, Ambre, 2021. "Strategic confusopoly: evidence from the UK mobile market," LSE Research Online Documents on Economics 113835, London School of Economics and Political Science, LSE Library.
    8. Productivity Commission, 2002. "International benchmarking of the Australian waterfront," Microeconomics 0207010, University Library of Munich, Germany.
    9. Gruenspecht, Howard, 2002. "Regulatory Tailoring, Reliability, and Price Volatility with Stochastic Breakdowns," RFF Working Paper Series dp-02-37, Resources for the Future.
    10. Changqi Wu & Leonard K. Cheng, 2000. "Hong Kong's Business Regulation in Transition," NBER Chapters, in: Deregulation and Interdependence in the Asia-Pacific Region, pages 157-194, National Bureau of Economic Research, Inc.
    11. Daniel, Joseph I, 1995. "Congestion Pricing and Capacity of Large Hub Airports: A Bottleneck Model with Stochastic Queues," Econometrica, Econometric Society, vol. 63(2), pages 327-370, March.
    12. Bradley, James R., 2005. "Optimal control of a dual service rate M/M/1 production-inventory model," European Journal of Operational Research, Elsevier, vol. 161(3), pages 812-837, March.
    13. James G. Mulligan & Nilotpal Das, 2005. "Persistent Adoption of Time-Saving Process Innovations," Working Papers 05-03, University of Delaware, Department of Economics.
    14. Mohammadi, Mohammad Ali, 2021. "Estimating Possible Subsidy Effects in Broadband Services and Deployment," MPRA Paper 111962, University Library of Munich, Germany.
    15. Sovinsky, Michelle & Helland, Eric, 2019. "Do Research Joint Ventures Serve a Collusive Function?," CEPR Discussion Papers 13533, C.E.P.R. Discussion Papers.
    16. R. Scott Hiller & Scott J. Savage, 2021. "Tariff Pass‐Through and Welfare in the Tablet Computer Market," Journal of Industrial Economics, Wiley Blackwell, vol. 69(2), pages 369-409, June.
    17. Grzybowski, Lukasz & Nicolle, Ambre & Zulehner, Christine, 2017. "Impact of competition and regulation on prices of mobile services: Evidence from France," 28th European Regional ITS Conference, Passau 2017 169465, International Telecommunications Society (ITS).
    18. Michelle Sovinsky, 2022. "Do Research Joint Ventures Serve a Collusive Function?," Journal of the European Economic Association, European Economic Association, vol. 20(1), pages 430-475.
    19. Walter Y. Oi, 1988. "Are Workers Overpaid By Big Firms?," Australian Journal of Management, Australian School of Business, vol. 13(2), pages 203-221, December.
    20. repec:eee:labchp:v:3:y:1999:i:pb:p:2165-2214 is not listed on IDEAS
    21. James G. Mulligan, 2006. "Endogenously determined Quality and Price In a Two-Sector Competitive Service Market With an Application to Down-Hill Skiing," Working Papers 06-01, University of Delaware, Department of Economics.

    More about this item

    Keywords

    Market structure; scale efficiency; antitrust policy; infrastructure; endogenous; quality; queuing; mobile telecommunications;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tse:wpaper:125551. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/tsetofr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.