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Broadband prices in the European Union: Competition and commercial strategies

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  • Calzada, Joan
  • Martínez, Fernando

Abstract

This paper analyzes the factors that determine the prices of Interne broadband access in a group of 15 EU countries in the period 2008-2011. Our econometric model shows the effect of several technical characteristics of the operator's offers: while the downstream speed has a positive impact in the prices, cable and fibre-to-the-home technologies reduce them. The operators marketing strategies are also taken into account: on the one hand, the commercialization of the broadband service bundled with voice telephony and/or television increases the prices, and plans with download volume caps reduce them. On the other hand, the segmentation of consumers through the release of several plans has a positive effect on the prices. One of the most important results of our analysis is to show how the competition patterns and regulatory policies impact in the retail broadband prices. In particular, we find that prices are higher in countries where entrants exhibit an intensive use of bitstream access and lower when they make a high use of direct access (unbundling local loop). This result highlights the importance of promoting facilitybased entry policies to obtain large price reductions. In spite of this, we don't find a significant impact of platform competition. .

Suggested Citation

  • Calzada, Joan & Martínez, Fernando, 2012. "Broadband prices in the European Union: Competition and commercial strategies," 23rd European Regional ITS Conference, Vienna 2012 60382, International Telecommunications Society (ITS).
    • Handle: RePEc:zbw:itse12:60382
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    Cited by:

    1. Muñoz-Acevedo, Ángela & Grzybowski, Lukasz, 2023. "Impact of roaming regulation on revenues and prices of mobile operators in the EU," International Journal of Industrial Organization, Elsevier, vol. 89(C).
    2. Halmenschlager, Christine & Mantovani, Andrea, 2017. "On the private and social desirability of mixed bundling in complementary markets with cost savings," Information Economics and Policy, Elsevier, vol. 39(C), pages 45-59.
    3. Aravantinos, Elias & Petre, Konstantin & Katsianis, Dimitris & Varoutas, Dimitris, 2021. "Determinants of FTTH tariffs evolution in EU: A panel data analysis," Telecommunications Policy, Elsevier, vol. 45(10).
    4. Kim, Wook Joon, 2014. "Estimating quality-adjusted prices for residential fixed broadband in South Korea 2000 - 2009," 20th ITS Biennial Conference, Rio de Janeiro 2014: The Net and the Internet - Emerging Markets and Policies 106886, International Telecommunications Society (ITS).
    5. Teklemariam, Mekuria Haile & Kwon, Youngsun, 2020. "Differentiating mobile broadband policies across diffusion stages: A panel data analysis," Telecommunications Policy, Elsevier, vol. 44(8).
    6. Jaume Belles-Sampera & Montserrat Guillén & José M. Merigó & Miguel Santolino, 2013. "“Indicators for the characterization of discrete Choquet integrals”," IREA Working Papers 201311, University of Barcelona, Research Institute of Applied Economics, revised May 2013.
    7. Haucap, Justus & Heimesho, Ulrich & Lange, Mirjam R. J., 2014. "The impact of tariff diversity on broadband diffusion: An empirical analysis," 20th ITS Biennial Conference, Rio de Janeiro 2014: The Net and the Internet - Emerging Markets and Policies 106898, International Telecommunications Society (ITS).
    8. Coynea, Bryan & Lyonsa, Sean, 2015. "The price of broadband quality: tracking the changing valuation of service characteristics," 26th European Regional ITS Conference, Madrid 2015 127159, International Telecommunications Society (ITS).
    9. Ambre Nicolle & Lukasz Grzybowski & Christine Zulehner, 2018. "Impact Of Competition, Investment, And Regulation On Prices Of Mobile Services: Evidence From France," Economic Inquiry, Western Economic Association International, vol. 56(2), pages 1322-1345, April.
    10. Joan Calzada & Anton Costas, 2013. "“La liberalización de las telecomunicaciones en España: control de la inflación y universalización del servicio”," IREA Working Papers 201310, University of Barcelona, Research Institute of Applied Economics, revised May 2013.
    11. Urueña López, Alberto & Gijón, Covadonga & Castro García-Muñoz, Raquel & Ureña Fernández, Olga & Feijóo, Claudio, 2015. "The drivers of the substitution of individual services for bundled services: The case of Spain," 26th European Regional ITS Conference, Madrid 2015 127187, International Telecommunications Society (ITS).
    12. Calzada, Joan & Diaz-Serrano, Luis, 2023. "Conflicting national policies: The creation of the euro and the rebalancing of telecommunications prices," Telecommunications Policy, Elsevier, vol. 47(1).
    13. Abrardi, Laura & Cambini, Carlo, 2019. "Ultra-fast broadband investment and adoption: A survey," Telecommunications Policy, Elsevier, vol. 43(3), pages 183-198.
    14. Viktória KOCSIS & Paul de BIJL & Rob van der NOLL & Bert TIEBEN, 2015. "Reconsidering ex ante Regulation in the Dutch Electronic Communications Market," Communications & Strategies, IDATE, Com&Strat dept., vol. 1(98), pages 61-83, 2nd quart.
    15. Grzybowski, Lukasz & Nicolle, Ambre & Zulehner, Christine, 2017. "Impact of competition and regulation on prices of mobile services: Evidence from France," 28th European Regional ITS Conference, Passau 2017 169465, International Telecommunications Society (ITS).
    16. Queder, Fabian, 2020. "Competitive effects of cable networks on FTTx deployment in Europe," Telecommunications Policy, Elsevier, vol. 44(10).
    17. Seán Lyons & Bryan Coyne, 2017. "The price of broadband quality: tracking the changing valuation of service characteristics," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 26(6), pages 516-532, August.
    18. Mirjam R. J. Lange, 2017. "Tariff diversity and competition policy: drivers for broadband adoption in the European Union," Journal of Regulatory Economics, Springer, vol. 52(3), pages 285-312, December.
    19. Ovington, Tom & Smith, Ron & Santamaría, Juana & Stammati, Luigi, 2017. "The impact of intra-platform competition on broadband penetration," Telecommunications Policy, Elsevier, vol. 41(3), pages 185-196.
    20. Katz, Raúl & Jung, Juan, 2025. "Drivers of mobile broadband pricing: Cross-national evidence on policy and market dynamics," Utilities Policy, Elsevier, vol. 93(C).
    21. Kim, Wook Joon & Kim, Yongkyu, 2018. "An estimation of quality-adjusted prices for mobile services in Korea," 22nd ITS Biennial Conference, Seoul 2018. Beyond the boundaries: Challenges for business, policy and society 190346, International Telecommunications Society (ITS).
    22. Joan Calzada & Fernando Martínez-Santos, 2016. "Pricing strategies and competition in the mobile broadband market," Journal of Regulatory Economics, Springer, vol. 50(1), pages 70-98, August.
    23. Manuela Alcañiz & Montserrat Guillén & Daniel Sánchez-Moscona & Miguel Santolino & Oscar Llatje & Lluís Ramon, 2013. "Prevalence of alcohol-impaired drivers based on random breath tests in a roadside survey," Working Papers XREAP2013-05, Xarxa de Referència en Economia Aplicada (XREAP), revised Jul 2013.

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    Keywords

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    JEL classification:

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

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