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Calling party pays or receiving party pays? The diffusion of mobile telephony with endogenous regulation

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  • Dewenter, Ralf
  • Kruse, Jörn

Abstract

This paper analyzes the impact on mobile telephony diffusion patterns of the two predominant payment regimes, calling party pays (CPP) and receiving party pays (RPP), for mobile termination services. By applying instrumental variable techniques to panel data we account for a possible interdependency of penetration rates and regulatory interventions. For this purpose we use data on political and institutional factors to instrument endogenous regulatory decisions. We conclude from our empirical analysis that there is no significant impact of either RPP or CPP on penetration rates. Therefore an application of RPP in order to obviate regulation of termination fees would be feasible.

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Bibliographic Info

Article provided by Elsevier in its journal Information Economics and Policy.

Volume (Year): 23 (2011)
Issue (Month): 1 (March)
Pages: 107-117

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Handle: RePEc:eee:iepoli:v:23:y:2011:i:1:p:107-117

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Web page: http://www.elsevier.com/locate/inca/505549

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Keywords: Mobile telephony markets Calling party pays Mobile termination fees Endogenous regulation;

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References

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Citations

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Cited by:
  1. Stühmeier Torben & Wenzel Tobias, 2012. "Regulating Advertising in the Presence of Public Service Broadcasting," Review of Network Economics, De Gruyter, vol. 11(2), pages 1-23, June.
  2. Gu, Yiquan & Wenzel, Tobias, 2012. "Transparency, entry, and productivity," Economics Letters, Elsevier, vol. 115(1), pages 7-10.
  3. Christos Genakos & Tommaso Valletti, 2011. "Seesaw in the Air: Interconnection Regulation and the Structure of Mobile Tariffs," CEP Discussion Papers dp1045, Centre for Economic Performance, LSE.
  4. Haucap, Justus & Herr, Annika & Frank, Björn, 2011. "In vino veritas: Theory and evidence on social drinking," DICE Discussion Papers 37, Heinrich‐Heine‐Universität Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
  5. Ingo Vogelsang, 2013. "The Endgame of Telecommunications Policy? A Survey," CESifo Working Paper Series 4545, CESifo Group Munich.
  6. Christin, Clémence, 2011. "Entry deterrence through cooperative R&D over-investment," DICE Discussion Papers 38, Heinrich‐Heine‐Universität Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
  7. Kongaut, Chatchai & Bohlin, Erik, 2012. "Impacts of mobile termination rates (MTRs) on retail prices: The implication for regulators," 23rd European Regional ITS Conference, Vienna 2012 60348, International Telecommunications Society (ITS).
  8. Barth, Anne-Kathrin & Heimeshoff, Ulrich, 2012. "Der angemessene Kostenmaßstab für Terminierungsentgelte - "Pure LRIC" vs. "KeL"," DICE Ordnungspolitische Perspektiven 29, Heinrich‐Heine‐Universität Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).

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