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“Broadband prices in the European Union: competition and commercial strategies”

  • Joan Calzada

    ()

    (Faculty of Economics, University of Barcelona)

  • Fernando Martínez

    ()

    (Competition Commission and Faculty of Economics, University of Barcelona)

This paper analyses the determinants of broadband Internet access prices in a group of 15 EU countries between 2008 and 2011. Using a rich panel dataset of broadband plans, we show the positive effect of downstream speed on prices, and report that cable and fibre-to-the-home technologies are available at lower prices per Mbps than xDSL technology. Operators’ marketing strategies are also analysed as we show how much prices rise when the broadband service is offered in a bundle with voice telephony and/or television, and how much they fall when download volume caps are included. The most insightful results of this study are provided by a group of metrics that represent the situation of competition and entry patterns in the broadband market. We show that consumer segmentation positively affects prices. On the other hand, broadband prices are higher in countries where entrants make greater use of bitstream access and lower when they use more intensively direct access (local loop unbundling). However, we do not find a significant effect of inter-platform competition on prices.

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File URL: http://www.ub.edu/irea/working_papers/2013/201309.pdf
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Paper provided by University of Barcelona, Research Institute of Applied Economics in its series IREA Working Papers with number 201309.

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Length: 33 pages
Date of creation: May 2013
Date of revision: May 2013
Handle: RePEc:ira:wpaper:201309
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