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How large is the magnitude of fixed-mobile call substitution? Empirical evidence from 16 Europen countries

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  • Barth, Anne-Kathrin
  • Heimeshoff, Ulrich

Abstract

This paper investigates the degree of fixed-mobile call substitution (FMCS). We use quarterly data from 2004 to mid 2010 on 16 mainly Western European countries. By applying dynamic panel data techniques, we are able to estimate short- and long-run elasticities. The own-price and cross-price elasticities found give strong empirical evidence for substitutional effects towards mobile services. In particular, the estimated cross-price elasticities of the mobile price on the fixed line call demand are relatively large compared to other studies.

Suggested Citation

  • 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).
    • Handle: RePEc:zbw:itse12:60391
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    Cited by:

    1. 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.
    2. McDonough, Carol C., 2013. "Consumer demand for fixed and mobile broadband," 24th European Regional ITS Conference, Florence 2013 88485, International Telecommunications Society (ITS).
    3. Grzybowski, Lukasz, 2014. "Fixed-to-mobile substitution in the European Union," Telecommunications Policy, Elsevier, vol. 38(7), pages 601-612.
    4. Charlita de Freitas, Luciano & Vilas Boas de Freitas, Igor, 2016. "Aurora of a new order in the Brazilian telecommunications sector and regulation," MPRA Paper 71550, University Library of Munich, Germany.
    5. Sobolewski, Maciej & Kopczewski, Tomasz, 2017. "Estimating demand for fixed-line telecommunication bundles," Telecommunications Policy, Elsevier, vol. 41(4), pages 227-241.
    6. Hoernig, Steffen & Bourreau, Marc & Cambini, Carlo, 2015. "Fixed-mobile substitution and termination rates," Telecommunications Policy, Elsevier, vol. 39(1), pages 65-76.
    7. Šaric, Amela & Lange, Mirjam R. J., 2014. "Deregulating fixed voice services? Empirical evidence from the European Union," 25th European Regional ITS Conference, Brussels 2014 101385, International Telecommunications Society (ITS).
    8. Schmitt, Stephan & Neu, Werner, 2017. "The beta in the WACC for regulated fixed and mobile telecommunica-tions services: Its role and robust estimation," 28th European Regional ITS Conference, Passau 2017 169496, International Telecommunications Society (ITS).
    9. Ünver, Mehmet Bilal & Göktaylar, Yavuz & Tezel, Fatih, 2015. "Regulatory Implications of FMS for Voice Services in Turkey: Analysis of Recent Regulatory Acts on Deregulation and Margin Squeeze," 26th European Regional ITS Conference, Madrid 2015 127186, International Telecommunications Society (ITS).
    10. 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; Fix-Mobile Substitution; Telecommunication Markets;
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