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Impact Of Competition, Investment, And Regulation On Prices Of Mobile Services: Evidence From France

Author

Listed:
  • Ambre Nicolle

    (Télécom ParisTech)

  • Lukasz Grzybowski

    (Télécom ParisTech)

  • Christine Zulehner

    (University of Vienna [Vienna])

Abstract

In this paper, we assess the impact of competition, investment and regulation on prices of mobile services in France. We estimate hedonic price regressions using data on tariff plans offered by the main mobile telecommunications operator in France between May 2011 and December 2014. In this time period, the obtained quality-adjusted price index decreased by about 42.8% as compared to a decline in weighted average prices without quality-adjustment of 8.7%. In a second step, we relate the quality-adjusted prices to a set of competition, investment and regulation variables and find that the launch of 4G networks by mobile operators was the main driver of price reductions for classic tariffs with commitment. Low-cost tariffs without commitment which were introduced to preempt the entry of low-cost competitor declined at the time of entry. Moreover, we find that regulation, which is approximated by the level of mobile termination charges and international roaming price caps for voice and data, has a joint significant impact on quality-adjusted prices. In percentage terms, competition is responsible for about 23.4% of total price decline and investments in 4G for 56.1%.

Suggested Citation

  • Ambre Nicolle & Lukasz Grzybowski & Christine Zulehner, 2018. "Impact Of Competition, Investment, And Regulation On Prices Of Mobile Services: Evidence From France," Post-Print hal-02102353, HAL.
  • Handle: RePEc:hal:journl:hal-02102353
    DOI: 10.1111/ecin.12547
    Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-02102353v2
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    Cited by:

    1. Ryan Hawthorne & Lukasz Grzybowski, 2021. "Distribution of the benefits of regulation vs. competition: The case of mobile telephony in South Africa," Post-Print hal-03235928, HAL.
    2. Wellmann, Nicolas, 2019. "Hello . . . Are You Still There? An Empirical Analysis How Market Structure Affects Quality of Mobile Networks," VfS Annual Conference 2019 (Leipzig): 30 Years after the Fall of the Berlin Wall - Democracy and Market Economy 203579, Verein für Socialpolitik / German Economic Association.
    3. Bourreau, Marc & Sun, Yutec & Verboven, Frank, 2018. "Market Entry, Fighting Brands and Tacit Collusion: The Case of the French Mobile Telecommunications Market," CEPR Discussion Papers 12866, C.E.P.R. Discussion Papers.
    4. Ryan Hawthorne & Lukasz Grzybowski, 2019. "Benefits of Regulation vs. Competition Where Inequality Is High: The Case of Mobile Telephony in South Africa," CESifo Working Paper Series 7703, CESifo.
    5. Hawthorne, Ryan & Grzybowski, Lukasz, 2021. "Distribution of the benefits of regulation vs. competition: The case of mobile telephony in South Africa," International Journal of Industrial Organization, Elsevier, vol. 74(C).
    6. Berne, Michel & Vialle, Pierre & Whalley, Jason, 2019. "An analysis of the disruptive impact of the entry of Free Mobile into the French mobile telecommunications market," Telecommunications Policy, Elsevier, vol. 43(3), pages 262-277.

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    More about this item

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications

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