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An empirical analysis of the state of competition in OECD mobile wireless markets

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  • Sung, Nakil
  • Kwon, Mi-ae

Abstract

Contra the current trend of deregulation, mobile wireless markets in the OECD member states appear, until recently, to have been more or less concentrated. The study estimates the equations for market concentration, mobile prices, and profits using annual panel data from 24 OECD member states for the 1998-2009 period, in order to assess their interaction. Mobile prices, measured by revenue per minute in constant USD PPP, are regarded as a direct measure of consumer welfare. Estimation results indicate that in the second half of the 2000s, market concentration had no effect on mobile prices, whereas the positive relationship between market concentration and profits persisted. In other words, the market-power hypothesis is rejected in the second half of the 2000s. This empirical result provides a strong case for a recent lenient approach towards regulation and merger attempts in OECD mobile wireless markets. Additionally, the study provides evidence that regulatory policies have affected mobile market structure and performance.

Suggested Citation

  • Sung, Nakil & Kwon, Mi-ae, 2011. "An empirical analysis of the state of competition in OECD mobile wireless markets," 22nd European Regional ITS Conference, Budapest 2011: Innovative ICT Applications - Emerging Regulatory, Economic and Policy Issues 52204, International Telecommunications Society (ITS).
    • Handle: RePEc:zbw:itse11:52204
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    References listed on IDEAS

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    1. Littlechild, S.C., 0. "Mobile termination charges: Calling Party Pays versus Receiving Party Pays," Telecommunications Policy, Elsevier, vol. 30(5-6), pages 242-277, June.
    2. Heli Koski & Tobias Kretschmer, 2004. "Entry, Standards and Competition: Firm Strategies and the Diffusion of Mobile Telephony," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 26(1), pages 89-113, November.
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    4. Joshua S. Gans & Stephen P. King & Julian Wright, 2005. "Wireless Communications," Monash Economics Working Papers archive-45, Monash University, Department of Economics.
    5. Goldberg, Lawrence G. & Rai, Anoop, 1996. "The structure-performance relationship for European banking," Journal of Banking & Finance, Elsevier, vol. 20(4), pages 745-771, May.
    6. Heli Koski & Tobias Kretschmer, 2004. "Entry, Standards and Competition: Firm Strategies and the Diffusion of Mobile Telephony," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 26(1), pages 89-113, November.
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    Citations

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    Cited by:

    1. Pauline Affeldt & Rainer Nitsche, 2014. "A price concentration study on European mobile telecom markets: Limitations and insights," ESMT Research Working Papers ESMT-14-07, ESMT European School of Management and Technology.
    2. Zaber, Moinul & Sirbu, Marvin, 2012. "Impact of spectrum management policy on the penetration of 3G technology," Telecommunications Policy, Elsevier, vol. 36(9), pages 762-782.
    3. Michail Katsigiannis & Timo Smura & Thomas Casey & Antti Sorri, 2013. "Techno-economic modeling of value network configurations for public wireless local area access," Netnomics, Springer, vol. 14(1), pages 27-46, November.

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    More about this item

    Keywords

    Mobile wireless markets; market structure; market performance; regulatory policy; competition;
    All these keywords.

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications

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