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Mobile Termination: What is the “Right” Charge?

Author

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  • Tommaso Valletti

    ()

  • George Houpis

    ()

Abstract

The regulation of fixed-to-mobile (F2M) termination charges has become increasingly important in Europe, Australia, and New Zealand under the Calling Party Pays principle. In the absence of any regulation, mobile operators have an incentive to set F2M termination charges “too high”. We show that the setting of the optimal F2M termination charges depends on the significance of network externalities, the intensity of competition in the mobile sector, and the distribution of customer preferences. We also discuss the merits of possible remedies which are not very intrusive. Copyright Springer Science+Business Media, Inc. 2005

Suggested Citation

  • Tommaso Valletti & George Houpis, 2005. "Mobile Termination: What is the “Right” Charge?," Journal of Regulatory Economics, Springer, vol. 28(3), pages 235-258, November.
  • Handle: RePEc:kap:regeco:v:28:y:2005:i:3:p:235-258
    DOI: 10.1007/s11149-005-3955-1
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    File URL: http://hdl.handle.net/10.1007/s11149-005-3955-1
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    References listed on IDEAS

    as
    1. Littlechild, S.C., 0. "Mobile termination charges: Calling Party Pays versus Receiving Party Pays," Telecommunications Policy, Elsevier, vol. 30(5-6), pages 242-277, June.
    2. Armstrong, Mark, 1997. "Mobile telephony in the UK," MPRA Paper 35405, University Library of Munich, Germany.
    3. Armstrong, Mark, 2001. "The theory of access pricing and interconnection," MPRA Paper 15608, University Library of Munich, Germany.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    mobile telephony; network externality; termination charges; L41; L96;

    JEL classification:

    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications

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