Working Paper No. 685

Competition vs. Regulation in Mobile Telecommunications

Published: December 20, 2006Pages: 50Keywords: Network Competition, Two-way Access; Access Price Competition; Entry, Regulation; Network SubstitutabilityJEL-codes: L51; L96

Competition vs. Regulation in Mobile Telecommunications Johan Stennek and Thomas P. Tangerås


This paper questions whether competition can replace sector-specific regulation of mobile telecommunications. We show that the monopolistic outcome prevails independently of market concentration when access prices are determined in bilateral negotiations.

A light-handed regulatory policy can induce effective competition. Call prices are close to the marginal cost if the networks are sufficiently close substitutes. Neither demand nor cost information is required.

A unique and symmetric call price equilibrium exists under symmetric access prices, provided that call demand is sufficiently inelastic. Existence encompasses the case of many networks and high network substitutability.

 

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Social Capital and Health

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Martin Ljunge, IFN, is the author of a chapter, "Trust promotes health: addressing reverse causality by studying children of immigrants", in a new book edited by Sherman Folland and Eric Nauenberg. The cutting edge of research is presented, covering the ever-expanding social capital field.

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