Armstrong, Mark and Wright, Julian (2007): Mobile Call Termination.
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Motivated by recent UK experience, we study the problem of mobile call termination. This is an intriguing policy story, in which regulation has been imposed on what appears to be a competitive industry. We introduce a framework which integrates two existing literatures: one analyzing fixed-to-mobile call termination (where the predicted market failure involves the termination charge being set at the monopoly level), and one analyzing mobile-to-mobile network interconnection (where the predicted termination charge is below the efficient level). Our unified framework allows us to consider the impact of wholesale arbitrage and demand-side substitution. With these features, we find the unregulated termination charge lies between the efficient and the monopoly benchmarks. There remains a rationale for regulation, albeit reduced relative to the earlier literature.
|Item Type:||MPRA Paper|
|Institution:||Department of Economics, University College London|
|Original Title:||Mobile Call Termination|
|Keywords:||Regulation; Mobile telephony; Oligopoly; Two-sided markets|
|Subjects:||L - Industrial Organization > L5 - Regulation and Industrial Policy > L51 - Economics of Regulation
L - Industrial Organization > L9 - Industry Studies: Transportation and Utilities > L96 - Telecommunications
D - Microeconomics > D4 - Market Structure and Pricing > D43 - Oligopoly and Other Forms of Market Imperfection
|Depositing User:||Mark Armstrong|
|Date Deposited:||12. Sep 2007|
|Last Modified:||01. Mar 2013 00:34|
Available Versions of this Item
Mobile call termination in the UK. (deposited 21. Mar 2007)
- Mobile Call Termination. (deposited 12. Sep 2007) [Currently Displayed]