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Fixed-Mobile Substitution in MENA Countries: The Future of Fixed-Line Markets

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  • Ezzat Riham Ahmed

    (Assistant Professor, Economics Department, Faculty of Economics and Political Science, Cairo University, Giza, Egypt)

Abstract

The aim of this paper is to study the occurrence of Fixed-Mobile Substitution (FMS) in the Middle East North African (MENA) region. While there have been many studies on developed countries, empirical evidence for developing countries is somehow limited. In the last few years, mobile cellular subscriptions achieved a tremendous growth across the MENA region making it the second fastest growing region in the world in terms of mobile subscriptions in 2012, and the fastest growing region in terms of mobile traffic in 2014. Fixed subscriptions have also grown but at a slower rate than mobile subscriptions. Using unbalanced data on 17 MENA countries over the period 1990–2009, we explore the relationship between fixed and mobile telephone services by using dynamic panel data models. We find empirical evidence for asymmetric one-way substitution between fixed-lines and mobile phones and we estimate own- and cross-price elasticities for fixed and mobile telephone services in MENA region. The results are then used to derive policy implications in terms of market redefinition, taxation policies, extension of universal services and broadband markets.

Suggested Citation

  • Ezzat Riham Ahmed, 2017. "Fixed-Mobile Substitution in MENA Countries: The Future of Fixed-Line Markets," Review of Network Economics, De Gruyter, vol. 16(4), pages 387-417, December.
    • Handle: RePEc:bpj:rneart:v:16:y:2017:i:4:p:387-417:n:1
    DOI: 10.1515/rne-2017-0013
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    More about this item

    Keywords

    fixed-mobile substitution; MENA region; regulation; telecom industry;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
    • O50 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - General

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