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Deregulating fixed voice services? Empirical evidence from the European Union

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  • Šaric, Amela
  • Lange, Mirjam R. J.

Abstract

This paper deals with the relationship between the traditional fixed-line, mobile and Voice over IP telephony in the EU.We estimate the supply and demand for fixed-line telephony using data on 25 EU member states for the 2006:Q2 - 2011:Q4 period. Employing instrumental variable approach, we obtain the following results. First, lower prices of Voice over IP and mobile reduce the demand for fixed-line telephony. This indicates some demand-side substitution. Second, we find no relationship between Voice over IP and fixed-line prices. Third, there is a positive and significant relationship between mobile and fixed-line prices. Estimated own- and cross-price elasticities are in the inelastic range. Hence, calls to deregulate fixed-line telephony may be too premature.

Suggested Citation

  • Šaric, Amela & Lange, Mirjam R. J., 2014. "Deregulating fixed voice services? Empirical evidence from the European Union," 25th European Regional ITS Conference, Brussels 2014 101385, International Telecommunications Society (ITS).
    • Handle: RePEc:zbw:itse14:101385
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    References listed on IDEAS

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    1. Barth, Anne-Kathrin & Heimeshoff, Ulrich, 2012. "How large is the magnitude of fixed-mobile call substitution? Empirical evidence from 16 European countries," DICE Discussion Papers 49, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
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    6. Lukasz Grzybowski & Frank Verboven, 2013. "Substitution and Complementarity between Fixed-line and Mobile Access," Working Papers 13-09, NET Institute.
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    8. Cecere, Grazia & Corrocher, Nicoletta, 2011. "The intensity of VoIP usage in Great Britain: Users' characteristics and firms' strategies," Telecommunications Policy, Elsevier, vol. 35(6), pages 522-531, July.
    9. Barth, Anne-Kathrin & Heimeshoff, Ulrich, 2011. "Does the growth of mobile markets cause the demise of fixed networks? Evidence from the European Union," 22nd European Regional ITS Conference, Budapest 2011: Innovative ICT Applications - Emerging Regulatory, Economic and Policy Issues 52144, International Telecommunications Society (ITS).
    10. Wolfgang Briglauer & Anton Schwarz & Christine Zulehner, 2011. "Is fixed-mobile substitution strong enough to de-regulate fixed voice telephony? Evidence from the Austrian markets," Journal of Regulatory Economics, Springer, vol. 39(1), pages 50-67, February.
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    More about this item

    Keywords

    Fixed networks; Mobile services; Market definition; Hypothetical monopolist test; (De)regulation;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications

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