IDEAS home Printed from https://ideas.repec.org/a/eee/telpol/v35y2011i1p36-50.html
   My bibliography  Save this article

Merger simulation using average market share: An application to the Optimus-TMN mobile merger case

Author

Listed:
  • Andini, Corrado
  • Cabral, Ricardo

Abstract

This paper develops a new merger simulation methodology based on the analysis of the performance change of a hypothetical firm with average market share. It applies the methodology to the Optimus-TMN mobile telecom merger case in Portugal, within the context of the December 2006 decision by the Portuguese Competition Authority to authorize the merger between their respective parent companies, Sonaecom and Portugal Telecom. The results suggest that the Optimus-TMN merger would have resulted in 3.8% higher prices and 14.9% lower marginal costs, and would have been welfare-enhancing. These findings attest to the importance of the "efficiency defense" hypothesis of mergers. They suggest that competition authorities are warranted in allowing further consolidation in the telecom sector, but that consolidation should be accompanied by strict retail price-cap regulation.

Suggested Citation

  • Andini, Corrado & Cabral, Ricardo, 2011. "Merger simulation using average market share: An application to the Optimus-TMN mobile merger case," Telecommunications Policy, Elsevier, vol. 35(1), pages 36-50, February.
  • Handle: RePEc:eee:telpol:v:35:y:2011:i:1:p:36-50
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S030859611000131X
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. repec:voj:journl:v:63:y:2016:i:1:p:25-43 is not listed on IDEAS

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:telpol:v:35:y:2011:i:1:p:36-50. 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: (Dana Niculescu). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/30471/description#description .

    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.

    We have no references for this item. You can help adding them by using 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.