Broadband prices in the European Union: Competition and commercial strategies

This paper analyzes the factors that determine the prices of Interne broadband access in a group of 15 EU countries in the period 2008-2011. Our econometric model shows the effect of several technical characteristics of the operator's offers: while the downstream speed has a positive impact in the prices, cable and fibre-to-the-home technologies reduce them. The operators marketing strategies are also taken into account: on the one hand, the commercialization of the broadband service bundled with voice telephony and/or television increases the prices, and plans with download volume caps reduce them. On the other hand, the segmentation of consumers through the release of several plans has a positive effect on the prices. One of the most important results of our analysis is to show how the competition patterns and regulatory policies impact in the retail broadband prices. In particular, we find that prices are higher in countries where entrants exhibit an intensive use of bitstream access and lower when they make a high use of direct access (unbundling local loop). This result highlights the importance of promoting facilitybased entry policies to obtain large price reductions. In spite of this, we don't find a significant impact of platform competition. .