Fixed-mobile integration

Steffen Hoernig, Marc Bourreau, Carlo Cambini

Research output: Contribution to journalArticlepeer-review

2 Citations (Scopus)

Abstract

Fixed-line incumbents often also own the largest mobile network. We consider the effect of this joint ownership on market outcomes. Our model predicts that while fixed-to-mobile call prices to the integrated mobile network are more efficient than under separation, those to rival mobile networks are distorted upwards, amplifying any incumbency advantage. This result is robust to changes in the competitiveness of the fixed market and to the presence of fixed-mobile substitution. As concerns potential remedies, a uniform off-net pricing constraint leads to higher welfare than functional separation, and even allows to maintain some of the efficiency gains.

Original languageEnglish
Pages (from-to)57-74
Number of pages18
JournalJournal Of Regulatory Economics
Volume45
Issue number1
DOIs
Publication statusPublished - 1 Feb 2014

Keywords

  • Call externality
  • Integration
  • Network competition
  • On/off-net pricing

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