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Competition in wholesale markets: Do MNOs compete to host MVNOs?

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  • Garrido, Elisabet
  • Whalley, Jason

Abstract

This paper extends previous research examining wholesale market shares of mobile network operators (MNOs). This study demonstrates that wholesale market concentration has decreased over time because of the increase of competition of MNOs for hosting mobile virtual network operators (MVNOs). However, differences in wholesale market shares between MNOs have not disappeared. We propose that those operators that are late entrants in a market and belong to an international group with a proactive attitude towards hosting virtual operators positively influences wholesale market shares of MNOs. The empirical analysis is based on a panel data from 2000 to 2010 corresponding to MNOs and virtual operators in five European countries with high development of the virtual mobile industry. By closely examining KPN we show how being an international mobile group specialising in the wholesale market across Europe has enabled it to exploit complementarities that exist between traditional and virtual businesses.

Suggested Citation

  • Garrido, Elisabet & Whalley, Jason, 2013. "Competition in wholesale markets: Do MNOs compete to host MVNOs?," Telecommunications Policy, Elsevier, vol. 37(11), pages 1124-1141.
  • Handle: RePEc:eee:telpol:v:37:y:2013:i:11:p:1124-1141
    DOI: 10.1016/j.telpol.2013.03.005
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    References listed on IDEAS

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    1. Kim, Byung Woon & Seol, Seong Ho, 2007. "Economic analysis of the introduction of the MVNO system and its major implications for optimal policy decisions in Korea," Telecommunications Policy, Elsevier, vol. 31(5), pages 290-304, June.
    2. Shin, Dong-Hee, 2010. "MVNO services: Policy implications for promoting MVNO diffusion," Telecommunications Policy, Elsevier, vol. 34(10), pages 616-632, November.
    3. Song, Jae-Do, 2010. "Various wholesale price equilibria for mobile virtual network operators," Telecommunications Policy, Elsevier, vol. 34(10), pages 633-648, November.
    4. Farrell, Joseph & Klemperer, Paul, 2007. "Coordination and Lock-In: Competition with Switching Costs and Network Effects," Handbook of Industrial Organization, Elsevier.
    5. Banerjee, Aniruddha & Dippon, Christian M., 2009. "Voluntary relationships among mobile network operators and mobile virtual network operators: An economic explanation," Information Economics and Policy, Elsevier, vol. 21(1), pages 72-84, February.
    6. Whalley, Jason & Curwen, Peter, 2012. "Incumbency and market share within European mobile telecommunication networks," Telecommunications Policy, Elsevier, vol. 36(3), pages 222-236.
    7. van Kranenburg, H.L. (Hans) & Hagedoorn, John, 2008. "Strategic focus of incumbents in the European telecommunications industry: The cases of BT, Deutsche Telekom and KPN," Telecommunications Policy, Elsevier, vol. 32(2), pages 116-130, March.
    8. Ordover, Janusz & Shaffer, Greg, 2007. "Wholesale access in multi-firm markets: When is it profitable to supply a competitor?," International Journal of Industrial Organization, Elsevier, vol. 25(5), pages 1026-1045, October.
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