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The impact of tariff diversity on broadband diffusion: An empirical analysis

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  • Haucap, Justus
  • Heimeshoff, Ulrich
  • Lange, Mirjam R. J.

Abstract

This paper provides an empirical analysis how tariff diversity affects fixed-line broadband uptake, utilizing a new data set with 1497 fixed-line and 2158 mobile broadband tariffs from 91 countries across the globe. An instrumental variable approach is applied to estimate demand, controlling for various industry and socio-economic factors. The empirical results indicate that, firstly, lower prices, more tariff diversity and higher income increase broadband penetration. Secondly, inter-platform competition and mobile broadband prices are not found to have a significant effect on fixed-line broadband penetration. This suggests that low prices and the diversity of broadband offerings are more important drivers of fixed broadband adoption than competition between various technologies (cable networks, fixed-line telephone networks, mobile networks).

Suggested Citation

  • Haucap, Justus & Heimeshoff, Ulrich & Lange, Mirjam R. J., 2014. "The impact of tariff diversity on broadband diffusion: An empirical analysis," DICE Discussion Papers 156, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    • Handle: RePEc:zbw:dicedp:156
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    Citations

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    Cited by:

    1. Tsai, Hsin-yi Sandy & Bauer, Johannes M., 2015. "Designing workable mobile broadband policies," 2015 Regional ITS Conference, Los Angeles 2015 146336, International Telecommunications Society (ITS).
    2. Oughton, Edward J., 2016. "Studying the Costs of Fibre Deployment in Fixed Broadband Access Infrastructure: Evidence from the UK's National Needs Assessment," 27th European Regional ITS Conference, Cambridge (UK) 2016 148695, International Telecommunications Society (ITS).
    3. Mirjam R. J. Lange, 2017. "Tariff diversity and competition policy: drivers for broadband adoption in the European Union," Journal of Regulatory Economics, Springer, vol. 52(3), pages 285-312, December.
    4. Abrardi, Laura & Cambini, Carlo, 2019. "Ultra-fast broadband investment and adoption: A survey," Telecommunications Policy, Elsevier, vol. 43(3), pages 183-198.
    5. Haucap, Justus & Heimeshoff, Ulrich, 2017. "Ordnungspolitik in der digitalen Welt," DICE Ordnungspolitische Perspektiven 90, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    6. Joan Calzada & Fernando Martínez-Santos, 2016. "Pricing strategies and competition in the mobile broadband market," Journal of Regulatory Economics, Springer, vol. 50(1), pages 70-98, August.

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    More about this item

    Keywords

    Broadband prices; Tariff diversity; Broadband demand; Broadband penetration; Broadband uptake; Price discrimination; Inter-platform competition;
    All these keywords.

    JEL classification:

    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications

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