توضیحات
ABSTRACT
Recent models of network competition demonstrate the incentives for incumbent firms to reduce receiver benefits in an entrant’s network through excessive off-net pricing. Theoretical reasoning behind the role of call externalities in limiting the market share of smaller networks assumes that receiving a call contributes to consumer utility. This paper tests this critical assumption with stated-preference data elicited from subscribers of mobile telephony in Poland. Our findings show that receiver benefits are a significant driver of mobile operator choice. Thus by reducing the volume of outgoing calls, larger networks can limit customer base growth of smaller rivals. Regulatory options for mitigating this effect are discussed. The size of market share gained by introducing a common off-net markup is low: 1.7–2.8% depending on the market segment. However under symmetric termination rates, an entrant would increase its market share by 6.1–8.5% at the expense of incumbents. In case of Poland, this would .shorten the catch-up period from eight to five years
INTRODUCTION
Economic externalities play a significant role in network industries. Telecommunication services, for example, generate various types of external benefits for their users. By controlling the extent to which those benefits are internalized, network operators can increase profits and improve their own competitive position in the market. In this paper, we show this empirically, using data from mobile telephony market in Poland. More specifically, we investigate how incumbent operators can realistically use call externalities to slow down the market share growth of late entrants (primarily in user or SIM card metrics). We also contribute to the discussion on the effects of making mobile termination rates (MTRs) asymmetric. Such regulation has been widely applied in Europe with the aim being to provide support by improving late entrants’ revenues from interconnection. We show that in the presence of call externalities, asymmetric MTR could also have a negative effect on a small network, slowing down its market share growth .
Year: ۲۰۱۸
Publisher : ELSEVIER
By : Maciej Sobolewski, Mikołaj Czajkowski
File Information: English Language/ 12 Page / size: 566 KB
سال : ۱۳۹۶
ناشر : ELSEVIER
کاری از : Maciej Sobolewski, Mikołaj Czajkowski
اطلاعات فایل : زبان انگلیسی / 12 صفحه / حجم : KB 566
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