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Competition vs. Regulation in Mobile Telecommunications

  • Stennek, Johan

    ()

    (Research Institute of Industrial Economics)

  • Tangerås, Thomas

    ()

    (Research Institute of Industrial Economics)

This paper questions whether competition can replace sector-specific regulation of mobile telecommunications. We show that the monopolistic outcome prevails independently of market concentration when access prices are determined in bilateral negotiations. A light-handed regulatory policy can induce effective competition. Call prices are close to the marginal cost if the networks are sufficiently close substitutes. Neither demand nor cost information is required. A unique and symmetric call price equilibrium exists under symmetric access prices, provided that call demand is sufficiently inelastic. Existence encompasses the case of many networks and high network substitutability.

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Paper provided by Research Institute of Industrial Economics in its series Working Paper Series with number 685.

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Length: 50 pages
Date of creation: 20 Dec 2006
Date of revision:
Handle: RePEc:hhs:iuiwop:0685
Contact details of provider: Postal: Research Institute of Industrial Economics, Box 55665, SE-102 15 Stockholm, Sweden
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