The Welfare Effects of Mobile Termination Rate Regulation in Asymmetric Oligopolies: The Case of Spain
22 Pages Posted: 24 Nov 2011
Date Written: October 1, 2011
Abstract
We examine the effects of mobile termination rate regulation in asymmetric oligopolies. We do this by extending existing models of asymmetric duopoly and symmetric oligopoly where consumer expectations about market shares are passive. We first calibrate product differentiation parameters using detailed data from the Spanish market from 2010. Next, we predict equilibrium outcomes and welfare effects under alternative scenarios of future termination rates. Lowering termination rates typically lowers profits of all networks and improves consumer and total surplus.
Keywords: Mobile Termination Rates, Network E¤ects, Simulations, Telecommunications, Welfare
JEL Classification: D43, K23, L51, L96
Suggested Citation: Suggested Citation
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