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Improving consumer mobility in the mobile voice services market: a comprehensive set of remedies

  • Amante, Ana
  • Vareda, João

Switching costs increase the rigidity of consumers demand and lessen competition between firms, effects that are particularly relevant in the mobile voice services market. This paper characterizes the most important mobility restrictive factors for consumers in this market, presenting specific examples and discussing their impact on competition. In addition, a survey was conducted to obtain data on consumption decisions by mobile voice customers in Portugal. The survey results suggest that switching costs represent more than 13 euros or 57% of the average monthly expenditure with these services. The disclosure of a new mobile phone number is the most difficult task in the switching process. Customers also showed high concern with respect to the possibility of losing quality of service. Compatibility costs also impose high restrictions to customer mobility. Following the identification of these restrictive factors, the adoption by policy makers of remedies to address the different search and switching costs is discussed and their implementation prioritized according to mobile customers' needs.

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Paper provided by International Telecommunications Society (ITS) in its series 21st European Regional ITS Conference, Copenhagen 2010: Telecommunications at new crossroads - Changing value configurations, user roles, and regulation with number 2.

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Date of creation: 2010
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Handle: RePEc:zbw:itse10:2
Contact details of provider: Web page: http://www.itseurope.org/

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  1. Buehler, Stefan & Dewenter, Ralf & Haucap, Justus, 2005. "Mobile Number Portability in Europe," Working Paper 41/2005, Helmut Schmidt University, Hamburg.
  2. Maicas, Juan Pablo & Polo, Yolanda & Javier Sese, F., 2009. "Reducing the level of switching costs in mobile communications: The case of Mobile Number Portability," Telecommunications Policy, Elsevier, vol. 33(9), pages 544-554, October.
  3. Toker Doganoglu, 2010. "Switching costs, experience goods and dynamic price competition," Quantitative Marketing and Economics, Springer, vol. 8(2), pages 167-205, June.
  4. Farrell, Joseph & Klemperer, Paul, 2006. "Coordination and Lock-In: Competition with Switching Costs and Network Effects," Competition Policy Center, Working Paper Series qt9n26k7v1, Competition Policy Center, Institute for Business and Economic Research, UC Berkeley.
  5. Lukasz Grzybowski, 2005. "Regulation of Mobile Telephony across the European Union: An Empirical Analysis," Journal of Regulatory Economics, Springer, vol. 28(1), pages 47-67, 07.
  6. Farrell, Joseph & Shapiro, Carl, 1988. "Dynamic Competition with Switching Costs," Department of Economics, Working Paper Series qt1h02g9q4, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
  7. Klemperer, Paul, 1987. "Markets with Consumer Switching Costs," The Quarterly Journal of Economics, MIT Press, vol. 102(2), pages 375-94, May.
  8. Klemperer, Paul, 1995. "Competition When Consumers Have Switching Costs: An Overview with Applications to Industrial Organization, Macroeconomics, and International Trade," Review of Economic Studies, Wiley Blackwell, vol. 62(4), pages 515-39, October.
  9. Klemperer, Paul D, 1987. "Entry Deterrence in Markets with Consumer Switching Costs," Economic Journal, Royal Economic Society, vol. 97(388a), pages 99-117, Supplemen.
  10. Lee, Jongsu & Kim, Yeonbae & Lee, Jeong-Dong & Park, Yuri, 2006. "Estimating the extent of potential competition in the Korean mobile telecommunications market: Switching costs and number portability," International Journal of Industrial Organization, Elsevier, vol. 24(1), pages 107-124, January.
  11. Yongmin Chen, 1997. "Paying Customers to Switch," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 6(4), pages 877-897, December.
  12. Shy, Oz, 2002. "A quick-and-easy method for estimating switching costs," International Journal of Industrial Organization, Elsevier, vol. 20(1), pages 71-87, January.
  13. Lukasz Grzybowski, 2008. "Estimating Switching Costs in Mobile Telephony in the UK," Journal of Industry, Competition and Trade, Springer, vol. 8(2), pages 113-132, June.
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