Référence

Sjaak Hurkens et Doh-Shin Jeon, « Mobile Termination and Mobile Penetration », IDEI Working Paper, n° 575, 28 juillet 2009.

Résumé

In 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.

Codes JEL

Partenaire de recherche

Remplacé par

Sjaak Hurkens et Doh-Shin Jeon, « Promoting Network Competition by Regulating Termination Charges », International Journal of Industrial Organization, vol. 30, n° 6, novembre 2012, p. 541–552.