IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article or follow this journal

Broadband prices in the European Union: Competition and commercial strategies

  • Calzada, Joan
  • Martínez-Santos, Fernando

This paper analyses the determinants of broadband Internet access prices in a group of 15 EU countries between 2008 and 2011. Using a rich panel data set of broadband plans, we find a positive effect of downstream speed on prices, and that the price per Mbps of cable modem and fibre technologies is lower than that of xDSL. Operators’ marketing strategies are also analysed as we show how much prices rise when the broadband service is offered in a bundle with voice telephony and/or television, and how much they fall when download volume caps are included. The most insightful results of this study are provided by a group of metrics that represent the situation of competition and entry patterns in the broadband market. We show that consumer segmentation positively affects prices. Moreover, broadband prices are higher in countries where entrants make greater use of bitstream access and lower in countries where there is an intensive use of direct access (local loop unbundling). We do not find a significant effect of inter-platform competition on prices.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.sciencedirect.com/science/article/pii/S0167624514000122
Download Restriction: Full text for ScienceDirect subscribers only

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by Elsevier in its journal Information Economics and Policy.

Volume (Year): 27 (2014)
Issue (Month): C ()
Pages: 24-38

as
in new window

Handle: RePEc:eee:iepoli:v:27:y:2014:i:c:p:24-38
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505549

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Teppayayon, Orada & Bohlin, Erik, 2010. "Functional separation in Swedish broadband market: Next step of improving competition," Telecommunications Policy, Elsevier, vol. 34(7), pages 375-383, August.
  2. António Afonso & Peter Claeys & Ricardo M. Sousa, 2009. "Fiscal Regime Shifts in Portugal," NIPE Working Papers 25/2009, NIPE - Universidade do Minho.
  3. David Castells & Vicente Royuela, 2011. "Agglomeration, Inequality and Economic Growth," IREA Working Papers 201114, University of Barcelona, Research Institute of Applied Economics, revised Apr 2012.
  4. Vicente Royuela & Manuel Sanchis, 2010. "La reforma de la contratación en el mercado de trabajo: entre la flexibilidad y la seguridad," IREA Working Papers 201006, University of Barcelona, Research Institute of Applied Economics, revised Mar 2010.
  5. Maya Bacache & Marc Bourreau & Germain Gaudin, 2014. "Dynamic Entry and Investment in New Infrastructures: Empirical Evidence from the Fixed Broadband Industry," Review of Industrial Organization, Springer, vol. 44(2), pages 179-209, March.
  6. João Vareda & Steffen Hoernig, 2007. "The race for telecoms infrastructure investment with bypass: Can access regulation achieve the first best?," Working Papers 29, Portuguese Competition Authority.
  7. Sandra Nieto Viramontes & Raul Ramos Lobo, 2011. "¿La sobreeducación de los padres afecta al rendimiento académico de sus hijos?," Investigaciones de Economía de la Educación volume 6, in: Antonio Caparrós Ruiz (ed.), Investigaciones de Economía de la Educación 6, edition 1, volume 6, chapter 11, pages 185-206 Asociación de Economía de la Educación.
  8. Vicente Royuela & Diona Lambiri & Bianca Biagi, 2006. "Economía Urbana y calidad de vida. Una revisión del estado del conocimiento en España," Working Papers CREAP2006-13, Xarxa de Referència en Economia Aplicada (XREAP), revised Dec 2006.
  9. Greenstein, Shane & McDevitt, Ryan C., 2011. "The broadband bonus: Estimating broadband Internet's economic value," Telecommunications Policy, Elsevier, vol. 35(7), pages 617-632, August.
  10. Peter Claeys & Luis Costa, 2012. "“A Note on the Relationship Between the Cyclicality of Markups and Fiscal Policy”," AQR Working Papers 201208, University of Barcelona, Regional Quantitative Analysis Group, revised Sep 2012.
  11. Alessia Matano & Paolo Naticchioni, 2012. "What Drives the Urban Wage Premium? Evidence along the Wage Distribution," IREA Working Papers 201203, University of Barcelona, Research Institute of Applied Economics, revised Feb 2012.
  12. Vicente Royuela & Miguel Vargas, 2007. "Defining housing market areas using commuting and migration algorithms.Catalonia (Spain) as an applied case study," IREA Working Papers 200707, University of Barcelona, Research Institute of Applied Economics, revised Apr 2007.
  13. Michele Cincera & Antonio Estache & Lauriane Dewulf, 2012. "On the (In) Effectiveness of Policies to Promote Broadband Diffusion in Europe (2003-2010): An Econometric Assessment," Working Papers ECARES ECARES 2012-032, ULB -- Universite Libre de Bruxelles.
  14. Ebru Kerimoglu & B. Can Karahasan, 2012. "Location Patterns of Creative Capital and Regional Disparities in Spain," IREA Working Papers 201202, University of Barcelona, Research Institute of Applied Economics, revised Feb 2012.
  15. Ramos, Raul & Duque, Juan Carlos & Nieto, Sandra, 2012. "Decomposing the Rural-Urban Differential in Student Achievement in Colombia Using PISA Microdata," IZA Discussion Papers 6515, Institute for the Study of Labor (IZA).
  16. Xavier Fageda & Rafael Rubio & Montserrat Termes, 2013. "“Determinants of Broadband Access: Is Platform Competition always the Key Variable to Success?”," IREA Working Papers 201303, University of Barcelona, Research Institute of Applied Economics, revised Mar 2013.
  17. Fabio Manca, 2009. "Technology Catching-up and the Role of Institutions," IREA Working Papers 200912, University of Barcelona, Research Institute of Applied Economics, revised Jun 2009.
  18. Carlos Guerrero de Lizardi, 2006. "Una aproximación al sesgo de medición del precio de las computadoras personales en México," Economía Mexicana NUEVA ÉPOCA, , vol. 0(1), pages 97-124, January-J.
  19. Mattia Nardotto & Tommaso Valletti & Frank Verboven, 2014. "Unbundling the Incumbent: Evidence from UK broadband," CEIS Research Paper 331, Tor Vergata University, CEIS, revised 03 Oct 2014.
  20. Javier Campos & Juan Luis Jiménez & Ancor Suárez-Alemán, 2012. "“Not always sunny in paradise: prices and brand diversity in touristic areas supermarkets”," IREA Working Papers 201211, University of Barcelona, Research Institute of Applied Economics, revised May 2012.
  21. Josep Lluís Carrion-i-Silvestre & María Dolores Gadea, 2013. "“GLS based unit root tests for bounded processes”," IREA Working Papers 201304, University of Barcelona, Research Institute of Applied Economics, revised Apr 2013.
  22. Enrique López-Bazo & Burhan Can Karahasan, 2011. "The Spatial Distribution of Human Capital: Can It Really Be Explained by Regional Differences in Market Access?," ERSA conference papers ersa11p1122, European Regional Science Association.
  23. Peter Claeys & Fabio Manca, 2011. "A missing spatial link in institutional quality," Applied Economics Letters, Taylor & Francis Journals, vol. 18(3), pages 223-227.
  24. Ebru Kerimoglu & Burhan Can Karahasan, 2011. "“Geography of talent and regional differences in Spain”," IREA Working Papers 201107, University of Barcelona, Research Institute of Applied Economics, revised Jun 2011.
  25. Shane Greenstein & Ryan C. McDevitt, 2010. "Evidence of a Modest Price Decline in US Broadband Services," NBER Working Papers 16166, National Bureau of Economic Research, Inc.
  26. Savage Scott J. & Waldman Donald M., 2004. "United States Demand for Internet Access," Review of Network Economics, De Gruyter, vol. 3(3), pages 1-20, September.
  27. Lee, Sangwon & Marcu, Mircea & Lee, Seonmi, 2011. "An empirical analysis of fixed and mobile broadband diffusion," Information Economics and Policy, Elsevier, vol. 23(3), pages 227-233.
  28. Jeffrey T. Prince & Shane Greenstein, 2011. "Does Service Bundling Reduce Churn?," Working Papers 2011-05, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
  29. Schwarz, Anton, 2007. "Wholesale market definition in telecommunications: The issue of wholesale broadband access," Telecommunications Policy, Elsevier, vol. 31(5), pages 251-264, June.
  30. Germà Bel & Elbert Dijkgraaf & Xavier Fageda & Raymond Gradus, 2008. "Similar problems, different solutions: Comparing refuse collection in the Netherlands and Spain," IREA Working Papers 200815, University of Barcelona, Research Institute of Applied Economics, revised Nov 2008.
  31. Michal Grajek & Lars-Hendrik Röller, 2009. "Regulation and investment in network industries: Evidence from European telecoms," ESMT Research Working Papers ESMT-09-004, ESMT European School of Management and Technology.
  32. Francesca Arnaboldi & Peter Claeys, 2008. "Internet Banking in Europe: a comparative analysis," IREA Working Papers 200811, University of Barcelona, Research Institute of Applied Economics, revised Sep 2008.
  33. Bouckaert, Jan & van Dijk, Theon & Verboven, Frank, 2010. "Access regulation, competition, and broadband penetration: An international study," Telecommunications Policy, Elsevier, vol. 34(11), pages 661-671, December.
  34. Andres, Luis & Cuberes, David & Diouf, Mame Astou & Serebrisky, Tomas, 2007. "Diffusion of the internet : a cross-country analysis," Policy Research Working Paper Series 4420, The World Bank.
  35. Bourreau, Marc & Dogan, PInar & Manant, Matthieu, 2010. "A critical review of the "ladder of investment" approach," Telecommunications Policy, Elsevier, vol. 34(11), pages 683-696, December.
  36. Raquel Ortega-Argilés & Mariacristina Piva & Marco Vivarelli, 2012. "The transatlantic productivity gap: Is R&D the main culprit?," DISCE - Quaderni del Dipartimento di Scienze Economiche e Sociali dises1284, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
  37. Ana María Osorio & Catalina Bolancé & Manuela Alcañiz, 2011. "Measuring early childhood health: a composite index comparing Colombian departments," IREA Working Papers 201122, University of Barcelona, Research Institute of Applied Economics, revised Oct 2011.
  38. Fageda, Xavier & Flores-Fillol, Ricardo, 2012. "Air services on thin routes: Regional versus low-cost airlines," Regional Science and Urban Economics, Elsevier, vol. 42(4), pages 702-714.
  39. Ingo Vogelsang, 2003. "Price Regulation of Access to Telecommunications Networks," Journal of Economic Literature, American Economic Association, vol. 41(3), pages 830-862, September.
  40. Eugenio J. Miravete & Lars-Hendrik Röller, 2004. "Estimating Price-Cost Markups Under Nonlinear Pricing Competition," Journal of the European Economic Association, MIT Press, vol. 2(2-3), pages 526-535, 04/05.
  41. Syed A. Basher & Josep Lluís Carrion-i-Silvestre, 2007. "Another Look at the Null of Stationary RealExchange Rates. Panel Data with Structural Breaks and Cross-section Dependence," IREA Working Papers 200710, University of Barcelona, Research Institute of Applied Economics, revised May 2007.
  42. Isabel Cortés-Jiménez & Manuela Pulina & Carme Riera i Prunera & Manuel Artís, 2009. "Tourism and Exports as a means of Growth," IREA Working Papers 200910, University of Barcelona, Research Institute of Applied Economics, revised May 2009.
  43. Harald Gruber & Pantelis Koutroumpis, 2013. "Competition enhancing regulation and diffusion of innovation: the case of broadband networks," Journal of Regulatory Economics, Springer, vol. 43(2), pages 168-195, April.
  44. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:eee:iepoli:v:27:y:2014:i:c:p:24-38. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.