Competition vs. Regulation in Mobile Telecommunications
AbstractThis 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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Bibliographic InfoPaper provided by Research Institute of Industrial Economics in its series Working Paper Series with number 685.
Length: 50 pages
Date of creation: 20 Dec 2006
Date of revision:
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More information through EDIRC
Network Competition; Two-way Access; Access Price Competition; Entry; Regulation; Network Substitutability;
Other versions of this item:
- Johan Stennek & Thomas Tangeras, 2008. "Competition vs. Regulation in Mobile Telecommunications," Working Papers 08-09, NET Institute.
- Stennek, Johan & Tangerås, Thomas P., 2007. "Competition vs. Regulation in Mobile Telecommunications," CEPR Discussion Papers 6073, C.E.P.R. Discussion Papers.
- L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
- L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-01-13 (All new papers)
- NEP-COM-2007-01-13 (Industrial Competition)
- NEP-IND-2007-01-13 (Industrial Organization)
- NEP-MIC-2007-01-13 (Microeconomics)
- NEP-NET-2007-01-13 (Network Economics)
- NEP-REG-2007-01-13 (Regulation)
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