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Asymmetry of mobile termination rates and the waterbed effect

Author

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  • Lee, Jongyong
  • Lee, Duk Hee

Abstract

This paper empirically analyzes the relationship between asymmetric regulation on mobile termination rates and mobile retail prices, using panel data collected from 20 OECD member countries for 22 quarters. In addition to the asymmetry of mobile access charges, the authors also focus on the impact of a number of variables, such as churn rates, mobile penetration rates, and the market concentration index on mobile operators' retail prices. The results reveal that pricing asymmetry in access services has a positive correlation with mobile retail prices. Therefore, this study supports the assumption that the waterbed effect between the asymmetry of mobile termination rates and retail prices may occur.

Suggested Citation

  • Lee, Jongyong & Lee, Duk Hee, 2012. "Asymmetry of mobile termination rates and the waterbed effect," 23rd European Regional ITS Conference, Vienna 2012 60353, International Telecommunications Society (ITS).
  • Handle: RePEc:zbw:itse12:60353
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    File URL: https://www.econstor.eu/bitstream/10419/60353/1/720906164.pdf
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    References listed on IDEAS

    as
    1. Christos Genakos & Tommaso Valletti, 2011. "Testing The “Waterbed” Effect In Mobile Telephony," Journal of the European Economic Association, European Economic Association, vol. 9(6), pages 1114-1142, December.
    2. Harbord, David & Hoernig, Steffen, 2010. "Welfare Analysis of Regulating Mobile Termination Rates in the UK (with an Application to the Orange/T-Mobile Merger)," CEPR Discussion Papers 7730, C.E.P.R. Discussion Papers.
    3. de Bijl,Paul & Peitz,Martin, 2008. "Regulation and Entry into Telecommunications Markets," Cambridge Books, Cambridge University Press, number 9780521066631, August.
    4. Jullien, Bruno & Rey, Patrick & Sand-Zantman, Wilfried, 2009. "Mobile Call Termination Revisited," TSE Working Papers 10-198, Toulouse School of Economics (TSE), revised Aug 2010.
    5. Genakos, Christos & Valletti, Tommaso, 2011. "Seesaw in the air: Interconnection regulation and the structure of mobile tariffs," Information Economics and Policy, Elsevier, vol. 23(2), pages 159-170, June.
    6. repec:eee:ecolet:v:71:y:2001:i:3:p:413-42 is not listed on IDEAS
    7. repec:dau:papers:123456789/79 is not listed on IDEAS
    8. Gans, Joshua S. & King, Stephen P., 2001. "Using 'bill and keep' interconnect arrangements to soften network competition," Economics Letters, Elsevier, vol. 71(3), pages 413-420, June.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Mobile termination rates; Waterbed effect; Asymmetry of MTRs; Mobile retail Rates; Panel data techniques;

    JEL classification:

    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L88 - Industrial Organization - - Industry Studies: Services - - - Government Policy
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications

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