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Mobile-only consumers arise from heterogeneous valuation of fixed services

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  • Petulowa, Marc
  • Liang, Julienne

Abstract

Mobile-only users are usually considered as a consequence of fixed-mobile substitution. Via a unique dataset based on a a large European country survey and consumers' invoice data, this study reveals heterogeneous preferences for fixed services among consumers. The data is fitted in a mixed logit model and willingness to pay (WTP) for fixed communications services are estimated. Results show that mobile-only consumers have a WTP for fixed services of 15 € per month, while the WTP of users of both fixed and mobile services is thrice higher. Considering that a typical monthly fee for fixed services is around 30 € the heterogeneous preferences for fixed services constitute an alternative explanation for the existence of mobile-only users, despite the complementarity of fixed and mobile broadband.

Suggested Citation

  • Petulowa, Marc & Liang, Julienne, 2016. "Mobile-only consumers arise from heterogeneous valuation of fixed services," 27th European Regional ITS Conference, Cambridge (UK) 2016 148699, International Telecommunications Society (ITS).
  • Handle: RePEc:zbw:itse16:148699
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    References listed on IDEAS

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    1. Grzybowski, Lukasz & Liang, Julienne, 2015. "Estimating demand for fixed-mobile bundles and switching costs between tariffs," Information Economics and Policy, Elsevier, vol. 33(C), pages 1-10.
    2. Savage, Scott J. & Waldman, Donald, 2005. "Broadband Internet access, awareness, and use: Analysis of United States household data," Telecommunications Policy, Elsevier, vol. 29(8), pages 615-633, September.
    3. Lukasz Grzybowski & Frank Verboven, 2016. "Substitution between fixed-line and mobile access: the role of complementarities," Journal of Regulatory Economics, Springer, vol. 49(2), pages 113-151, April.
    4. Srinuan, Pratompong & Srinuan, Chalita & Bohlin, Erik, 2012. "Fixed and mobile broadband substitution in Sweden," Telecommunications Policy, Elsevier, vol. 36(3), pages 237-251.
    5. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521747387, December.
    6. Mélisande Cardona & Anton Schwarz & B. Yurtoglu & Christine Zulehner, 2009. "Demand estimation and market definition for broadband Internet services," Journal of Regulatory Economics, Springer, vol. 35(1), pages 70-95, February.
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    More about this item

    Keywords

    fixed mobile dependence; heterogeneous preferences; substitution versus complementarity; mobile only;

    JEL classification:

    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications

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