Political Determinants of Competition in the Mobile Telecommunication Industry
59 Pages Posted: 6 Jan 2017 Last revised: 4 May 2018
There are 3 versions of this paper
Political Determinants of Competition in the Mobile Telecommunication Industry
Political Determinants of Competition in the Mobile Telecommunication Industry
Political Determinants of Competition in the Mobile Telecommunication Industry
Date Written: April 1, 2018
Abstract
We study how political factors can shape competition in the mobile telecommunication sector. We show that the way a government designs the rules of the game has an impact on concentration, competition, and prices. Pro-competition rules reduce prices, but do not hurt the quality of services or investments. More democratic governments tend to design rule that are more pro-competition, while more politically connected operators are able to distort the rules in their favor, restricting competition. Government intervention has large redistributive effects: U.S. consumers would gain $65bn ($44bn) a year if U.S. mobile service prices were in line with Germany (Denmark).
Keywords: Political Connections, Capture, Antitrust
JEL Classification: P16, D72, L11
Suggested Citation: Suggested Citation