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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. --

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Bibliographic Info

Paper provided by International Telecommunications Society (ITS) in its series 22nd European Regional ITS Conference, Budapest 2011: Innovative ICT Applications - Emerging Regulatory, Economic and Policy Issues with number 52144.

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Date of creation: 2011
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Handle: RePEc:zbw:itse11:52144

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Web page: http://www.itseurope.org/

Related research

Keywords: Dynamic Panel Model; Fix-Mobile Substitution; Telecommunication Markets;

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  9. Richard Blundell & Steve Bond, 1995. "Initial conditions and moment restrictions in dynamic panel data models," IFS Working Papers, Institute for Fiscal Studies W95/17, Institute for Fiscal Studies.
  10. Haucap, Justus, 2003. "The Economics of Mobile Telephone Regulation," Working Paper 4/2003, Helmut Schmidt University, Hamburg.
  11. Richard Blundell & Steve Bond & Frank Windmeijer, 2000. "Estimation in dynamic panel data models: improving on the performance of the standard GMM estimator," IFS Working Papers, Institute for Fiscal Studies W00/12, Institute for Fiscal Studies.
  12. Alicia H. Munnell, 1992. "Policy Watch: Infrastructure Investment and Economic Growth," Journal of Economic Perspectives, American Economic Association, vol. 6(4), pages 189-198, Fall.
  13. Wolfgang Briglauer & Anton Schwarz & Christine Zulehner, 2011. "Is fixed-mobile substitution strong enough to de-regulate fixed voice telephony? Evidence from the Austrian markets," Journal of Regulatory Economics, Springer, Springer, vol. 39(1), pages 50-67, February.
  14. Lars-Hendrik Roller & Leonard Waverman, 2001. "Telecommunications Infrastructure and Economic Development: A Simultaneous Approach," American Economic Review, American Economic Association, American Economic Association, vol. 91(4), pages 909-923, September.
  15. Martin Cave & Luigi Prosperetti, 2001. "European Telecommunications Infrastructures," Oxford Review of Economic Policy, Oxford University Press, Oxford University Press, vol. 17(3), pages 416-431.
  16. Madden, Gary & Coble-Neal, Grant, 2004. "Economic determinants of global mobile telephony growth," Information Economics and Policy, Elsevier, Elsevier, vol. 16(4), pages 519-534, December.
  17. Jeffrey M. Wooldridge, 2003. "Solutions Manual and Supplementary Materials for Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262232332, December.
  18. M Arellano & O Bover, 1990. "Another Look at the Instrumental Variable Estimation of Error-Components Models," CEP Discussion Papers dp0007, Centre for Economic Performance, LSE.
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  20. Marcelo Soto, 2009. "System GMM Estimation With A Small Sample," UFAE and IAE Working Papers, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC) 780.09, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
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Cited by:
  1. 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).
  2. Barth, Anne-Kathrin & Heimeshoff, Ulrich, 2012. "How large is the magnitude of fixed-mobile call substitution? Empirical evidence from 16 Europen countries," 23rd European Regional ITS Conference, Vienna 2012 60391, International Telecommunications Society (ITS).
  3. Barth, Anne-Kathrin & Heimeshoff, Ulrich, 2012. "Der angemessene Kostenmaßstab für Terminierungsentgelte - "Pure LRIC" vs. "KeL"," DICE Ordnungspolitische Perspektiven 29, Heinrich‐Heine‐Universität Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).

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