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Distribution of the benefits of regulation vs. competition: The case of mobile telephony in South Africa

Author

Listed:
  • Ryan Hawthorne

    (University of Cape Town)

  • Lukasz Grzybowski

    (SES - Département Sciences Economiques et Sociales - Télécom ParisTech, ECOGE - Economie Gestion - I3 SES - Institut interdisciplinaire de l’innovation de Telecom Paris - Télécom ParisTech - I3 - Institut interdisciplinaire de l’innovation - CNRS - Centre National de la Recherche Scientifique, IP Paris - Institut Polytechnique de Paris)

Abstract

We test for the distributional effects of regulation and entry in the mobile telecommunications sector in a highly unequal country, South Africa. Using six waves of a consumer survey of over 134,000 individuals between 2009-2014, we estimate a discrete choice model allowing for individual-specific price-responsiveness and preferences for network operators. Next, we use a demand and supply equilibrium framework to simulate prices and the distribution of welfare without entry and mobile termination rate regulation. We find that, in the South African context, regulation benefits consumers significantly more than entry does, and that high-income consumers and city-dwellers benefit more in terms of increased consumer surplus.

Suggested Citation

  • 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.
    • Handle: RePEc:hal:journl:hal-03235928
    DOI: 10.1016/j.ijindorg.2020.102673
    Note: View the original document on HAL open archive server: https://telecom-paris.hal.science/hal-03235928
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    More about this item

    Keywords

    Mobile telecommunications; Regulation; Entry; Termination rates; Discrete choice JEL Classification: L13; L40; L50; L96;
    All these keywords.

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications

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