Substitution and Complementarity between Fixed-line and Mobile Access
AbstractWe use rich survey data on 133,825 households from 27 EU countries during 2005-2011 to analyze substitution between fixed-line and mobile telecommunications services. We estimate a discrete choice model where households may choose between having mobile or fixed-line voice access only, or using both technologies at the same time. We obtain the following main findings. First, fixed-line and mobile connections are on average perceived as substitutes. But there is substantial heterogeneity across households and EU regions, with stronger substitution in Central and Eastern European countries. Second, there is strong complementarity between fixed-line and mobile connections that are offered by the fixed-line incumbent operator. This gives the incumbent a possibility to leverage its position in the fixed-line market into the mobile market. Third, fixed broadband technologies such as DSL and cable generate strong complementarities between fixed and mobile access, while mobile broadband strengthens substitution (at a smaller scale). The emergence of fixed broadband has thus been an important additional source through which incumbents leverage their strong position in the fixed-line network.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by NET Institute in its series Working Papers with number 13-09.
Length: 37 pages
Date of creation: Sep 2013
Date of revision:
Contact details of provider:
Web page: http://www.NETinst.org/
fixed-to-mobile substitution; incumbency advantage; broadband access;
Find related papers by JEL classification:
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
- L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-10-05 (All new papers)
- NEP-COM-2013-10-05 (Industrial Competition)
- NEP-DCM-2013-10-05 (Discrete Choice Models)
- NEP-EUR-2013-10-05 (Microeconomic European Issues)
- NEP-ICT-2013-10-05 (Information & Communication Technologies)
- NEP-IND-2013-10-05 (Industrial Organization)
- NEP-NET-2013-10-05 (Network Economics)
- NEP-REG-2013-10-05 (Regulation)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Matthew Gentzkow, 2007. "Valuing New Goods in a Model with Complementarity: Online Newspapers," American Economic Review, American Economic Association, vol. 97(3), pages 713-744, June.
- Kenneth Train, 2003.
"Discrete Choice Methods with Simulation,"
Online economics textbooks,
SUNY-Oswego, Department of Economics, number emetr2, January.
- Michael R. Ward & Glenn A. Woroch, 2005. "Fixed-Mobile Telephone Subscription Substitution in the U.S," Working Papers 0501, University of Texas at Arlington, Department of Economics.
- Lukasz Grzybowski & Chiraz Karamti, 2010.
"Competition In Mobile Telephony In France And Germany,"
University of Manchester, vol. 78(6), pages 702-724, December.
- Lukasz Grzybowski & Chiraz Karamti, 2007. "Competition in Mobile Telephony in France and Germany," Working Papers 07-24, NET Institute, revised Sep 2007.
- Ward, Michael R. & Woroch, Glenn A., 2010. "The effect of prices on fixed and mobile telephone penetration: Using price subsidies as natural experiments," Information Economics and Policy, Elsevier, vol. 22(1), pages 18-32, March.
- Lukasz Grzybowski, 2012. "Fixed-to-Mobile Substitution in the European Union," Working Papers 271, Economic Research Southern Africa.
- Rodini, Mark & Ward, Michael R. & Woroch, Glenn A., 0. "Going mobile: substitutability between fixed and mobile access," Telecommunications Policy, Elsevier, vol. 27(5-6), pages 457-476, June.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Nicholas Economides).
If references are entirely missing, you can add them using this form.