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Título

Mobile Termination and Mobile Penetration

AutorHurkens, Sjaak ; Jeon, Doh-Shin
Palabras claveMobile penetration
Termination charge
Access pricing
Networks
Interconnection
Regulation
Telecommunications
Fecha de publicación31-jul-2009
SerieUFAE and IAE Working Papers ;
774.09
ResumenIn this paper, we study how access pricing affects network competition when subscription demand is elastic and each network uses non-linear prices and can apply termination-based price discrimination. In the case of a fixed per minute termination charge, we find that a reduction of the termination charge below cost has two opposing effects: it softens competition but helps to internalize network externalities. The former reduces mobile penetration while the latter boosts it. We find that firms always prefer termination charge below cost for either motive while the regulator prefers termination below cost only when this boosts penetration. Next, we consider the retail benchmarking approach (Jeon and Hurkens, 2008) that determines termination charges as a function of retail prices and show that this approach allows the regulator to increase penetration without distorting call volumes.
Descripción37 pages, 3 figures.-- JEL Classification Codes: D4, K23, L51, L96. -- The paper was previously circulated under the title "A Retail Benchmarking Approach to Efficient Two-Way Access Pricing: Termination-Based Price Discrimination with Elastic Subscription Demand".
Versión del editorhttp://pareto.uab.es/wp/2009/77709.pdf
URIhttp://hdl.handle.net/10261/17703
Aparece en las colecciones: (IAE) Informes y documentos de trabajo
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