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Does the growth of mobile markets cause the demise of fixed networks? Evidence from the European Union

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  • Barth, Anne-Kathrin
  • Heimeshoff, Ulrich

Abstract

The increasing usage of mobile communication and the declining demand for fixed line telephony in Europe make the analysis of substitutional effects between fixed and mobile networks a key aspect for future telecommunication regulation. Using a unique dataset which contains information on all 27 European Union members from 2003 to 2009, we analyze substitutability between fixed and mobile telecommunications services in Europe by applying dynamic panel data techniques. We find strong empirical evidence for substitution from fixed to cellular networks throughout Europe. In addition, the article reveals resulting policy implications.

Suggested Citation

  • Barth, Anne-Kathrin & Heimeshoff, Ulrich, 2012. "Does the growth of mobile markets cause the demise of fixed networks? Evidence from the European Union," DICE Discussion Papers 42, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    • Handle: RePEc:zbw:dicedp:42
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    Cited by:

    1. Barth, Anne-Kathrin & Heimeshoff, Ulrich, 2012. "How large is the magnitude of fixed-mobile call substitution? Empirical evidence from 16 European countries," DICE Discussion Papers 49, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    2. Lange, Mirjam R.J. & Saric, Amela, 2016. "Substitution between fixed, mobile, and voice over IP telephony – Evidence from the European Union," Telecommunications Policy, Elsevier, vol. 40(10), pages 1007-1019.
    3. Bourna, Maria & Mitomo, Hitoshi, 2014. "Understanding broadband under-utilization in Japan," 20th ITS Biennial Conference, Rio de Janeiro 2014: The Net and the Internet - Emerging Markets and Policies 106887, International Telecommunications Society (ITS).
    4. 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.
    5. Hoernig, Steffen & Bourreau, Marc & Cambini, Carlo, 2015. "Fixed-mobile substitution and termination rates," Telecommunications Policy, Elsevier, vol. 39(1), pages 65-76.
    6. Böckers, Veit & Heimeshoff, Ulrich, 2014. "The extent of European power markets," Energy Economics, Elsevier, vol. 46(C), pages 102-111.
    7. Lange, Mirjam R. J. & Šaric, Amela, 2014. "Deregulating fixed voice services? Empirical evidence from the European Union," 20th ITS Biennial Conference, Rio de Janeiro 2014: The Net and the Internet - Emerging Markets and Policies 106864, International Telecommunications Society (ITS).
    8. Liangy, Julienne & Petulowa, Marc, 2012. "Mobile only users powered by fixed-mobile substitution," 23rd European Regional ITS Conference, Vienna 2012 60363, International Telecommunications Society (ITS).
    9. Gallardo, Fernando & Méndez, Mariano & Monjas, Manuel & Sánchez, Fernando, 2015. "Real Options on New Generation Access Networks based on FTTH. An approach to the Spanish Case," 26th European Regional ITS Conference, Madrid 2015 127143, International Telecommunications Society (ITS).
    10. Payam Hanafizadeh & Parastou Hatami & Erik Bohlin, 2019. "Business models of Internet service providers," Netnomics, Springer, vol. 20(1), pages 55-99, April.
    11. Oğuz, Fuat & Akkemik, K. Ali & Göksal, Koray, 2015. "Toward a wider market definition in broadband: The case of Turkey," Utilities Policy, Elsevier, vol. 37(C), pages 111-119.
    12. Barth, Anne-Kathrin & Heimeshoff, Ulrich, 2014. "What is the magnitude of fixed–mobile call substitution? Empirical evidence from 16 European countries," Telecommunications Policy, Elsevier, vol. 38(8), pages 771-782.
    13. Barth, Anne-Kathrin & Heimeshoff, Ulrich, 2012. "Der angemessene Kostenmaßstab für Terminierungsentgelte - "Pure LRIC" vs. "KeL"," DICE Ordnungspolitische Perspektiven 29, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).

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    Keywords

    dynamic panel model; fixed-mobile substitution; telecommunication markets;
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