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Regulated termination rates and competition among Tunisian mobile network operators. Barriers, bias, and incentives

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  • Bouali, Safieddine

Abstract

Since 2006, the Tunisian National Regulatory Authority has been imposing multiannual mobile-to-mobile termination rates, first on the duopoly of Tunisie Télécom and Tunisiana, and then on all three providers once Orange Tunisie entered the market in 2010. This research studies the interplay between interconnection rates for mobile call termination and the retail price competition for prepaid SIM cards, predominantly chosen by Tunisian consumers. We show that the duopoly was practicing “price alignment” for off-net calls, and that subsequently, the third provider entering the market sparked a decisive initial price drop associated with the non-reciprocal rate it enjoyed. However, the price war, which benefited consumers, only occurred when the Regulatory Body eliminated differential tariffs between on and off-net calls in the retail market. It follows that, everything else being equal, an interconnection rate drop alone will not lead to a decrease in retail prices.

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  • Bouali, Safieddine, 2017. "Regulated termination rates and competition among Tunisian mobile network operators. Barriers, bias, and incentives," Telecommunications Policy, Elsevier, vol. 41(7), pages 573-586.
    • Handle: RePEc:eee:telpol:v:41:y:2017:i:7:p:573-586
    DOI: 10.1016/j.telpol.2017.07.003
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    Cited by:

    1. Safieddine Bouali, 2020. "Third-Degree Path-Dependences Of The Tunisian Competition Framework And The Regulatory Capture [Dépendances Au Chemin De Troisième Degré Du Cadre Tunisien De La Concurrence Et Capture Réglementaire," Working Papers hal-02932853, HAL.

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    More about this item

    JEL classification:

    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices

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