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Competition in Turkish mobile telecommunications markets: Price elasticities and network substitution

Author

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  • Karacuka, Mehmet
  • Haucap, Justus
  • Heimeshoff, Ulrich

Abstract

This paper estimates demand elasticities for Turkish mobile telecommunications markets. In contrast to most other studies, firm-level data is used to estimate dynamic panel data models including instrumental variable techniques. Both short- and long-run elasticities are calculated, yielding a long-run price elasticity of -0.72 for the post-paid market and of -0.33 for the pre-paid market. The short-run price elasticity is estimated to be -0.36 for the post-paid market and -0.20 for the pre-paid market. In addition, there is evidence of fixed-to-mobile traffic substitution for consumers who use pre-paid cards.

Suggested Citation

  • Karacuka, Mehmet & Haucap, Justus & Heimeshoff, Ulrich, 2011. "Competition in Turkish mobile telecommunications markets: Price elasticities and network substitution," Telecommunications Policy, Elsevier, vol. 35(2), pages 202-210, March.
  • Handle: RePEc:eee:telpol:v:35:y:2011:i:2:p:202-210
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    Citations

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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," DICE Discussion Papers 221, University of Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    2. Covadonga Gijón Tascón & Teresa Garín-Muñoz, & Teodosio Pérez-Amaral, 2012. "Satisfaction and protection of individual mobile telecommunications consumers," Documentos de Trabajo del ICAE 2012-21, Universidad Complutense de Madrid, Facultad de Ciencias Económicas y Empresariales, Instituto Complutense de Análisis Económico.
    3. Wellmann, Nicolas, 2017. "OTT-Messaging and Mobile Telecommunication: A Joint Market? An Empirical Approach," 28th European Regional ITS Conference, Passau 2017 169503, International Telecommunications Society (ITS).
    4. Basaran, Alparslan A. & Cetinkaya, Murat & Bagdadioglu, Necmiddin, 2014. "Operator choice in the mobile telecommunications market: Evidence from Turkish urban population," Telecommunications Policy, Elsevier, vol. 38(1), pages 1-13.
    5. Mihail BUŞU, 2014. "How Concentrated Is The Romanian Mobile Market?," SEA - Practical Application of Science, Fundația Română pentru Inteligența Afacerii, Editorial Department, issue 4, pages 473-482, July.
    6. Karacuka, Mehmet & Çatık, A. Nazif & Haucap, Justus, 2013. "Consumer choice and local network effects in mobile telecommunications in Turkey," Telecommunications Policy, Elsevier, vol. 37(4), pages 334-344.
    7. Wellmann, Nicolas, 2017. "OTT-messaging and mobile telecommunication: A joint market? - An empirical approach," DICE Discussion Papers 256, University of Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    8. Jerry Hausman & Agustin Ros, 2013. "An econometric assessment of telecommunications prices and consumer surplus in Mexico using panel data," Journal of Regulatory Economics, Springer, vol. 43(3), pages 284-304, June.
    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. Thomas P. Tangerås, 2014. "Network competition with income effects," RAND Journal of Economics, RAND Corporation, vol. 45(3), pages 645-673, September.
    11. Ward, Michael R. & Zheng, Shilin, 2012. "Mobile and fixed substitution for telephone service in China," Telecommunications Policy, Elsevier, vol. 36(4), pages 301-310.

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