IDEAS home Printed from https://ideas.repec.org/p/zbw/dicedp/256.html
   My bibliography  Save this paper

OTT-messaging and mobile telecommunication: A joint market? - An empirical approach

Author

Listed:
  • Wellmann, Nicolas

Abstract

OTT-messenger such as facebook, WhatsApp have gained wide popularity among mobile users while traffic of text messaging has been in strong decline in several countries. This work is the first to provide an empirical analysis how consumption of OTT-messengers affects demand for text messaging and mobile telephony services. Our findings suggest that social and messaging apps may complement demand for text messaging and mobile voice services. More generally we identify the different nature of mobile telecommunication services as key element to explain why reductions of text messaging traffic have been so drastic in some countries and why an analogue development for mobile voice is rather unlikely.

Suggested Citation

  • Wellmann, Nicolas, 2017. "OTT-messaging and mobile telecommunication: A joint market? - An empirical approach," DICE Discussion Papers 256, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    • Handle: RePEc:zbw:dicedp:256
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/162779/1/893137103.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. 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.
    2. Grzybowski, Lukasz, 2014. "Fixed-to-mobile substitution in the European Union," Telecommunications Policy, Elsevier, vol. 38(7), pages 601-612.
    3. Dewenter Ralf & Haucap Justus, 2008. "Demand Elasticities for Mobile Telecommunications in Austria," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 228(1), pages 49-63, February.
    4. Appelbe, T. W. & Snihur, N. A. & Dineen, C. & Farnes, D. & Giordano, R., 1988. "Point-to-point modelling: An application to Canada-Canada and Canada-United States long distance calling," Information Economics and Policy, Elsevier, vol. 3(4), pages 311-331.
    5. Peitz, Martin & Valletti, Tommaso, 2015. "Reassessing competition concerns in electronic communications markets," Telecommunications Policy, Elsevier, vol. 39(10), pages 896-912.
    6. Karacuka, Mehmet & Haucap, Justus & Heimeshoff, Ulrich, 2011. "Competition in Turkish mobile telecommunications markets: Price elasticities and network substitution," Telecommunications Policy, Elsevier, vol. 35(2), pages 202-210, March.
    7. Youngsoo Kim & Rahul Telang & William B. Vogt & Ramayya Krishnan, 2010. "An Empirical Analysis of Mobile Voice Service and SMS: A Structural Model," Management Science, INFORMS, vol. 56(2), pages 234-252, February.
    8. Grzybowski, Lukasz & Pereira, Pedro, 2008. "The complementarity between calls and messages in mobile telephony," Information Economics and Policy, Elsevier, vol. 20(3), pages 279-287, September.
    9. Lange, Mirjam R.J. & Saric, Amela, 2016. "Substitution between fixed, mobile, and voice over IP telephony – Evidence from the European Union," Telecommunications Policy, Elsevier, vol. 40(10), pages 1007-1019.
    10. Doh-Shin Jeon & Jean-Jacques Laffont & Jean Tirole, 2004. "On the Receiver-Pays Principle," RAND Journal of Economics, The RAND Corporation, vol. 35(1), pages 85-110, Spring.
    11. Gerpott, Torsten J. & Thomas, Sandra, 2014. "Empirical research on mobile Internet usage: A meta-analysis of the literature," Telecommunications Policy, Elsevier, vol. 38(3), pages 291-310.
    12. Lukasz Grzybowski & Frank Verboven, 2016. "Substitution between fixed-line and mobile access: the role of complementarities," Journal of Regulatory Economics, Springer, vol. 49(2), pages 113-151, April.
    13. Carlo Cambini & Tommaso M. Valletti, 2008. "Information Exchange And Competition In Communications Networks," Journal of Industrial Economics, Wiley Blackwell, vol. 56(4), pages 707-728, December.
    14. K. Andersson & Ø Foros & F. Steen, 2009. "Text and voice: complements, substitutes or both?," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 18(6), pages 1231-1247, December.
    15. Basalisco, Bruno, 2012. "The effect of user interaction on the demand for mobile text messages: Evidence from cross-country data," Information Economics and Policy, Elsevier, vol. 24(2), pages 132-144.
    16. Appelbe, Trent W & Dineen, C.R. & Solvason, D.L. & Hsiao, C., 1992. "Econometric Modelling of Canadian Long Distance Calling: A Comparison of Aggregate Time Series versus Point-to-Point Panel Data Approaches," Empirical Economics, Springer, vol. 17(1), pages 125-140.
    17. Kim, Jeong-Yoo & Lim, Yoonsung, 2001. "An economic analysis of the receiver pays principle," Information Economics and Policy, Elsevier, vol. 13(2), pages 231-260, June.
    18. Oghuma, Apollos Patricks & Chang, Younghoon & Libaque-Saenz, Christian Fernando & Park, Myeong-Cheol & Rho, Jae Jeung, 2015. "Benefit-confirmation model for post-adoption behavior of mobile instant messaging applications: A comparative analysis of KakaoTalk and Joyn in Korea," Telecommunications Policy, Elsevier, vol. 39(8), pages 658-677.
    19. Feasey, Richard, 2015. "Confusion, denial and anger: The response of the telecommunications industry to the challenge of the Internet," Telecommunications Policy, Elsevier, vol. 39(6), pages 444-449.
    20. Teresa Garin-Munoz & Teodosio Perez-Amaral, 1999. "A model of Spain-Europe telecommunications," Applied Economics, Taylor & Francis Journals, vol. 31(8), pages 989-997.
    21. Gerpott, Torsten J. & Meinert, Phil, 2016. "The impact of mobile Internet usage on mobile voice calling behavior: A two-level analysis of residential mobile communications customers in Germany," Telecommunications Policy, Elsevier, vol. 40(1), pages 62-76.
    22. Scaglione, Miriam & Giovannetti, Emanuele & Hamoudia, Mohsen, 2015. "The diffusion of mobile social networking: Exploring adoption externalities in four G7 countries," International Journal of Forecasting, Elsevier, vol. 31(4), pages 1159-1170.
    Full references (including those not matched with items on IDEAS)

    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. Wellmann, Nicolas, 2017. "OTT-Messaging and Mobile Telecommunication: A Joint Market? An Empirical Approach," 28th European Regional ITS Conference, Passau 2017 169503, International Telecommunications Society (ITS).
    2. Wellmann, Nicolas, 2019. "Are OTT messaging and mobile telecommunication an interrelated market? An empirical analysis," Telecommunications Policy, Elsevier, vol. 43(9).
    3. Basalisco, Bruno, 2012. "The effect of user interaction on the demand for mobile text messages: Evidence from cross-country data," Information Economics and Policy, Elsevier, vol. 24(2), pages 132-144.
    4. Lange, Mirjam R.J. & Saric, Amela, 2016. "Substitution between fixed, mobile, and voice over IP telephony – Evidence from the European Union," Telecommunications Policy, Elsevier, vol. 40(10), pages 1007-1019.
    5. 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.
    6. Quaglione, Davide & Matteucci, Nicola & Furia, Donatella & Marra, Alessandro & Pozzi, Cesare, 2020. "Are mobile and fixed broadband substitutes or complements? New empirical evidence from Italy and implications for the digital divide policies," Socio-Economic Planning Sciences, Elsevier, vol. 71(C).
    7. Vélez-Velásquez, Juan Sebastián, 2019. "Merger effects with product complementarity: Evidence from Colombia’s telecommunications," Information Economics and Policy, Elsevier, vol. 49(C).
    8. Parsons, Steve G. & Duffy-Deno, Kevin T., 2021. "Are telecommunications regulators correct in their beliefs that network size affects origination/termination?," Telecommunications Policy, Elsevier, vol. 45(2).
    9. 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).
    10. Harbord, David & Hoernig, Steffen, 2010. "Welfare Analysis of Regulating Mobile Termination Rates in the UK (with an Application to the Orange/T-Mobile Merger)," MPRA Paper 21515, University Library of Munich, Germany.
    11. Jiao Xu & Chris Forman & Yu Jeffrey Hu, 2019. "Battle of the Internet Channels: How Do Mobile and Fixed-Line Quality Drive Internet Use?," Service Science, INFORMS, vol. 30(1), pages 65-80, March.
    12. 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.
    13. Hurkens, Sjaak & López, Ángel L., 2012. "The welfare effects of mobile termination rate regulation in asymmetric oligopolies: The case of Spain," Telecommunications Policy, Elsevier, vol. 36(5), pages 369-381.
    14. 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.
    15. Luis López, Ángel, 2011. "Mobile termination rates and the receiver-pays regime," Information Economics and Policy, Elsevier, vol. 23(2), pages 171-181, June.
    16. Steffen Hoernig & Marc Bourreau & Carlo Cambini, 2014. "Fixed-mobile integration," Journal of Regulatory Economics, Springer, vol. 45(1), pages 57-74, February.
    17. David Harbord & Steffen Hoernig, 2015. "Welfare Analysis of Regulating Mobile Termination Rates in the U.K," Journal of Industrial Economics, Wiley Blackwell, vol. 63(4), pages 673-703, December.
    18. Carlo Cambini & Tommaso M. Valletti, 2008. "Information Exchange And Competition In Communications Networks," Journal of Industrial Economics, Wiley Blackwell, vol. 56(4), pages 707-728, December.
    19. Mirjam R. J. Lange, 2017. "Tariff diversity and competition policy: drivers for broadband adoption in the European Union," Journal of Regulatory Economics, Springer, vol. 52(3), pages 285-312, December.
    20. Sjaak Hurkens & Ángel Luis López, 2010. "Mobile Termination and Consumer Expectations under the Receiver-Pays Regime," Working Papers 10-12, NET Institute.

    More about this item

    Keywords

    OTT-messenger; mobile telecommunication; market definition; regulation; mature markets; communication behavior;
    All these keywords.

    JEL classification:

    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • C36 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Instrumental Variables (IV) Estimation

    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:zbw:dicedp:256. 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: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/diduede.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.