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Mobile call termination in the UK

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  • Armstrong, Mark
  • Wright, Julian

Abstract

We discuss policy towards mobile call termination, illustrated by the 2002 Competition Commission enquiry into the UK mobile market. We present a model of the mobile market which includes both fixed-to-mobile and mobile-to-mobile call termination. In broad terms, the former service is likely to involve monopoly pricing if left unchecked, while the latter service---if the termination charge is jointly chosen by networks---may provide the mobile sector with the means by which to relax competition. Competition is often relaxed by choosing a low mobile-to-mobile termination charge. If feasible, then, unregulated networks often wish to set different termination charges depending on whether traffic originates on the fixed or mobile network. By contrast, social optimality often requires that uniform termination charges be imposed.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 2344.

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Date of creation: 21 Mar 2007
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Handle: RePEc:pra:mprapa:2344

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Related research

Keywords: Telecommunications; Regulation; Oligopoly; Call termination;

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References

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  1. Christos Genakos & Tommaso Valletti, 2007. "Testing the "Waterbed" Effect in Mobile Telephony," CEP Discussion Papers dp0827, Centre for Economic Performance, LSE.
  2. Jong-Hee Hahn, 2000. "Network Competition and Interconnection with Heterogeneous Subscribers," Keele Department of Economics Discussion Papers (1995-2001), Department of Economics, Keele University 2000/11, Department of Economics, Keele University.
  3. Hoernig, Steffen, 2007. "On-net and off-net pricing on asymmetric telecommunications networks," Information Economics and Policy, Elsevier, vol. 19(2), pages 171-188, June.
  4. Wright, Julian, 2002. "Access Pricing under Competition: An Application to Cellular Networks," Journal of Industrial Economics, Wiley Blackwell, vol. 50(3), pages 289-315, September.
  5. Gans, J.S. & King, S.P., 2000. "Mobile Network Competition, Customer Ignorance and Fixed-to-Mobile Call Prices," Department of Economics - Working Papers Series, The University of Melbourne 734, The University of Melbourne.
  6. Jean-Jacques Laffont & Patrick Rey & Jean Tirole, 1998. "Network Competition: I. Overview and Nondiscriminatory Pricing," RAND Journal of Economics, The RAND Corporation, vol. 29(1), pages 1-37, Spring.
  7. Dixit, Avinash K, 1986. "Comparative Statics for Oligopoly," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 27(1), pages 107-22, February.
  8. Tommaso Valletti & George Houpis, 2005. "Mobile Termination: What is the “Right” Charge?," Journal of Regulatory Economics, Springer, vol. 28(3), pages 235-258, November.
  9. Joshua S. Gans & Stephen P. King & Julian Wright, 2005. "Wireless Communications," Monash Economics Working Papers archive-45, Monash University, Department of Economics.
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