This paper studies the effect of termination rates on the observed substitution between fixed and mobile calls and access, in a model where consumers can subscribe to one or both types of o¤ers. Simulations show that each (fixed or mobile) termination rate has a positive effect on the take-up of the corresponding service, via the waterbed effect, and lowers subscriptions to the other service, via a cost effect. The prevailing asymmetric regulation, with very low fixed and higher mobile termination rates, tends to have implemented the optimal fee structure. However, the interests of the mobile operators and of the different customer groups did not coincide, and this fee structure may have reduced overall market participation.
Fixed-Mobile Substitution and Termination Rates / Bourreau, M.; Cambini, Carlo; Hoernig, S.. - In: TELECOMMUNICATIONS POLICY. - ISSN 0308-5961. - 39:(2015), pp. 65-76.
Fixed-Mobile Substitution and Termination Rates
CAMBINI, CARLO;
2015
Abstract
This paper studies the effect of termination rates on the observed substitution between fixed and mobile calls and access, in a model where consumers can subscribe to one or both types of o¤ers. Simulations show that each (fixed or mobile) termination rate has a positive effect on the take-up of the corresponding service, via the waterbed effect, and lowers subscriptions to the other service, via a cost effect. The prevailing asymmetric regulation, with very low fixed and higher mobile termination rates, tends to have implemented the optimal fee structure. However, the interests of the mobile operators and of the different customer groups did not coincide, and this fee structure may have reduced overall market participation.Pubblicazioni consigliate
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https://hdl.handle.net/11583/2585593
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