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On-Net/Off-Net Price Discrimination and 'Bill-and-Keep' vs. 'Cost-Based' Regulation of Mobile Termination Rates

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Author Info

  • Harbord, David
  • Pagnozzi, Marco

Abstract

This paper surveys the recent literature on competition between mobile network operators in the presence of call externalities and network effects. It shows that the regulation of mobile termination rates based on “long-run incremental costs” increases networks’ strategic incentives to inefficiently set high on-net/off-net price differentials, thus harming smaller networks and new entrants. The paper argues in favor of a “bill-and-keep” system for mobile-to-mobile termination, and presents international evidence in support of this conclusion.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 14540.

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Date of creation: Jan 2008
Date of revision:
Handle: RePEc:pra:mprapa:14540

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Related research

Keywords: mobile termination; network effects; call externalities; bill-and-keep;

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References

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Citations

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Cited by:
  1. Steffen Hoernig & Marc Bourreau & Carlo Cambini, 2013. "Fixed-Mobile Integration," FEUNL Working Paper Series wp574, Universidade Nova de Lisboa, Faculdade de Economia.
  2. Sjaak Hurkens & Ángel L. López, 2010. "Mobile Termination, Network Externalities, and Consumer Expectations," Working Papers 441, Barcelona Graduate School of Economics.

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