IDEAS home Printed from https://ideas.repec.org/a/emc/ecomex/v22y2013i1p207-233.html
   My bibliography  Save this article

Switching Costs in Mobile Telephony: Evidence for the Mexican Case

Author

Listed:
  • Giovanni Tapia Lezama

    () (Coordinador especialista “B”, Subgerencia de Análisis de Iniciativas Económicas y Normativas, Petróleos Mexicanos Corporativo (Pemex). México, D.F. Mexico.)

Abstract

This article identifies and calculates switching costs and network effects between the two leading mobile operators in Mexico: Telcel and Movistar. In order to do this, the model created by Suleymanova & Wey (2008) was calibrated, and additional evidence is presented. The study finds that switching costs are more relevant than network effects, which generates a fat-cat effect. These costs have declined over time but remain high, inhibiting competition. The costs are asymmetrical, as Telcel users face higher costs. The relevant switching costs are the ones derived from search and comparison of information, and those created by the network effects through tariffs.

Suggested Citation

  • Giovanni Tapia Lezama, 2013. "Switching Costs in Mobile Telephony: Evidence for the Mexican Case," Economía Mexicana NUEVA ÉPOCA, , vol. 0(1), pages 207-233, January-J.
  • Handle: RePEc:emc:ecomex:v:22:y:2013:i:1:p:207-233
    as

    Download full text from publisher

    File URL: http://www.economiamexicana.cide.edu/num_anteriores/XXII-1/06_EM_Costos_de_traspaso_(207-233).pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. de Melo, Martha & Denizer, Cevdet & Gelb, Alan, 1996. "Patterns of Transition from Plan to Market," World Bank Economic Review, World Bank Group, vol. 10(3), pages 397-424, September.
    2. Eijffinger, S.C.W., 1993. "Central bank independence in twelve industrial countries," Other publications TiSEM 0401b17a-e2c7-4179-ace9-a, Tilburg University, School of Economics and Management.
    3. Alex Cukierman, 1992. "Central Bank Strategy, Credibility, and Independence: Theory and Evidence," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262031981, January.
    4. Cukierman, Alex & Miller, Geoffrey P. & Neyapti, Bilin, 2002. "Central bank reform, liberalization and inflation in transition economies--an international perspective," Journal of Monetary Economics, Elsevier, vol. 49(2), pages 237-264, March.
    5. Jakob De Haan & Clemens L.J. Siermann, 1996. "Central bank independence, inflation and political instability in developing countries," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 1(2), pages 135-147.
    6. Marta Campillo & Jeffrey A. Miron, 1997. "Why Does Inflation Differ across Countries?," NBER Chapters,in: Reducing Inflation: Motivation and Strategy, pages 335-362 National Bureau of Economic Research, Inc.
    7. Al-Marhubi, Fahim & Willett, Thomas D, 1995. "The Anti Inflationary Influence of Corporatist Structures and Central Bank Independence: The Importance of the Hump Shaped Hypothesis," Public Choice, Springer, vol. 84(1-2), pages 153-162, July.
    8. Loungani, Prakash & Sheets, Nathan, 1997. "Central Bank Independence, Inflation, and Growth in Transition Economies," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 29(3), pages 381-399, August.
    9. Andersen, Torben M. & Schneider, Friedrich, 1986. "Coordination of fiscal and monetary policy under different institutional arrangements," European Journal of Political Economy, Elsevier, vol. 2(2), pages 169-191.
    10. Eijffinger, S. & De Hann, J., 1995. "The Political Economy of Central Bank Independence," Papers 9587, Tilburg - Center for Economic Research.
    11. Berger, Helge & de Haan, Jakob & Eijffinger, Sylvester C W, 2001. " Central Bank Independence: An Update of Theory and Evidence," Journal of Economic Surveys, Wiley Blackwell, vol. 15(1), pages 3-40, February.
    12. de Melo, Martha & Denizer, Cevdet & Gelb, Alan, 1996. "From plan to market : patterns of transition," Policy Research Working Paper Series 1564, The World Bank.
    13. Haan, Jakob de & Kooi, Willem J., 2000. "Does central bank independence really matter?: New evidence for developing countries using a new indicator," Journal of Banking & Finance, Elsevier, vol. 24(4), pages 643-664, April.
    14. Eijffinger, S.C.W. & de Haan, J., 1996. "Central Bank independence - Only part of the inflation story : A comment," Other publications TiSEM 8afcab3c-9541-44ef-ab3e-6, Tilburg University, School of Economics and Management.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    switching costs; empirical estimate of switching costs; competition; mobile telephony market.;

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

    Statistics

    Access and download statistics

    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:emc:ecomex:v:22:y:2013:i:1:p:207-233. 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: (Ricardo Tiscareño). General contact details of provider: .

    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.