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Competition vs. Regulation in Mobile Telecommunications

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Author Info
Stennek, Johan () (Research Institute of Industrial Economics)
Tangerås, Thomas () (Research Institute of Industrial Economics)

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Abstract

This paper questions whether competition can replace sector-specific regulation of mobile telecommunications. We show that the monopolistic outcome prevails independently of market concentration when access prices are determined in bilateral negotiations. A light-handed regulatory policy can induce effective competition. Call prices are close to the marginal cost if the networks are sufficiently close substitutes. Neither demand nor cost information is required. A unique and symmetric call price equilibrium exists under symmetric access prices, provided that call demand is sufficiently inelastic. Existence encompasses the case of many networks and high network substitutability.

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Publisher Info
Paper provided by Research Institute of Industrial Economics in its series Working Paper Series with number 685.

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Length: 50 pages
Date of creation: 20 Dec 2006
Date of revision:
Handle: RePEc:hhs:iuiwop:0685

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Related research
Keywords: Network Competition; Two-way Access; Access Price Competition; Entry; Regulation; Network Substitutability;

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Find related papers by JEL classification:
L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications

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    Other versions:
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