nep-com New Economics Papers
on Industrial Competition
Issue of 2014‒01‒10
25 papers chosen by
Russell Pittman
US Government

  1. Heterogenous switching costs By Biglaiser, Gary; Crémer, Jacques; Dobos, Gergely
  2. Competitive Cross-Subsidization By Chen, Zhijun; Rey, Patrick
  3. Análisis de los efectos explotativos en integraciones empresariales a partir del modelo de Cournot: el caso de mercados con bienes homogéneos By Herrera Saavedra, Juan Pablo; Sánchez Navarro, Dennis
  4. A Price Theory of Vertical and Lateral Integration under Productivity Heterogeneity By Serfes , Konstantinos
  6. Complementarity, Fragmentation, and the Effects of Patent Thickets By NAGAOKA Sadao; NISHIMURA Yoichiro
  7. Entry and Competition in a Transition Economy: The Case of Slovakia By Martin Lábaj; Peter Silaniè; Christoph Weiss
  8. Constrained or Unconstrained Price for Debit Card Payment? By Manjong Lee
  9. Nonprofit tax exemptions and market structure: The case of fitness centers By Harrison, Teresa; Seim, Katja
  10. All-Units Discounts: Experimental Evidence from the Vending Industry By Christopher T. Conlon; Julie Holland Mortimer
  11. Complement or substitute? The internet as an advertising channel, evidence on advertisers on the Italian market, 2005-2009 By Gambaro, Marco; Puglisi, Riccardo
  12. The effects of asymmetric regulation on the quality of broadband networks By Kocsis, Viktória
  13. Assessing access problems in online media platforms By Valcke, Peggy; Wahyuningtyas, Sih Yuliana; Graef, Inge
  14. Net neutrality at internet backbone provider level By Baglioni, Laura; Calabrese, Armando; Ghiron, Nathan Levialdi
  15. The impact of regulation and competition on the adoption of fibre-based broadband services: Recent evidence from the European Union member states By Briglauer, Wolfgang
  16. Regulatory fallacies in global telecommunications: The case of international mobile roaming By Knieps, Günter; Zenhäusern, Patrick
  17. Spectrum licensing, policy instruments and market entry By Madden, Gary; Bohlin, Erik; Tran, Thien; Morey, Aaron
  18. Does one more or one less mobile opertor affect prices? A comprehensive ex-post evaluation of entries and mergers in European mobile telecommunication markets By Csorba, Gergely; Pápai, Zoltán
  19. How to price the unbundled local loop in the transition from copper to fiber access networks? By Neumann, Karl-Heinz; Vogelsang, Ingo
  20. Estimation of switching costs and network effects in mobile telecommunications in Poland By Czajkowski, Mikołaj; Sobolewski, Maciej
  21. Strategy scenario selection in the competition of mobile ecosystems By Lee, Hyun Joo; Kim, Jin Ki
  22. Analyzing competitive effects between fixed and mobile broadband By Wulf, Jochen; Brenner, Walter
  23. The role of network sharing in transforming the operator business: Impact on profitability and competition By Mölleryd, Bengt G.; Markendahl, Jan
  24. The determinants of mobile operator switching and policy implications in developing countries: A case study of Thailand By Keesookpun, Chutipong; Mitomo, Hitoshi
  25. Dynamics of broadbands demand: Substitution or complementarity between fixed and mobile technologies? An application to the Portuguese case By Silva, Rita Filipe; Proença, Isabel; Vareda, João

  1. By: Biglaiser, Gary; Crémer, Jacques; Dobos, Gergely
    Abstract: We consider a simple two period model where consumers have different switching costs. Before the market opens, there was an incumbent who sold to all consumers. We identify the equilibrium both with Stackelberg and Bertrand competition and show how the presence of low switching cost consumers benefits the incumbent, despite the fact that it never sells to any of them.
    Keywords: switching, cost
    JEL: D43 L13
    Date: 2013–12
  2. By: Chen, Zhijun; Rey, Patrick
    Abstract: This paper analyzes competitive pricing policies by multiproduct firms facing heterogeneous buying patterns. We show that cross-subsidization arises when firms have comparative advantages on different products but are equally efficient overall: Firms earn a profit from multi-stop shoppers by charging positive margins on their strong products but, as price competition for one-stop shoppers drives total margins down to zero, they price weaker products below cost. Banning below-cost pricing leads to higher profits and higher prices for one-stop shoppers, and may reduce consumer surplus as well as total social welfare.
    Keywords: Bertrand competition, cross-subsidization, buying patterns, one-stop and multi-stop shopping
    JEL: L11 L41
    Date: 2013–12–14
  3. By: Herrera Saavedra, Juan Pablo; Sánchez Navarro, Dennis
    Abstract: This paper models the possible effects over the market price of a homogeneous good when there is a merger. The analysis will be made with two scenarios: (i) using technologies homogenous between firms, (ii) and with any degree of heterogeneity. It is assumed an linear inverse function of demand which represents the preferences of the consumers, technologies with constant returns to scale and an environment in which competition is made a la Cournot. Este artículo modela los posibles efectos que sobre el precio de un mercado de un bien homogéneo se puede producir ante una integración empresarial. El análisis se realizará a partir de dos escenarios, (i) considerando tecnologías similares entre firmas y (ii) con algún grado de heterogeneidad por grupos de empresas. Se asume una función inversa de demanda lineal que representa las preferencias de los consumidores, tecnologías con rendimientos constantes a escala y un ambiente de competencia, en el cual las empresas compiten a la Cournot.
    Keywords: oligopoly, Cournot, homogeneous goods, firm behavior, production, non-cooperative.
    JEL: C72 D22 D24 D43
    Date: 2013–01–02
  4. By: Serfes , Konstantinos (School of Economics LeBow College of Business Drexel University)
    Abstract: We develop a model of organizational choice in a perfectly competitive product market with heterogeneous firms and incomplete contracts. Successful production requires two inputs that are supplied by two different firms. The input suppliers can either remain as separate units or integrate to form an enterprise. The market consists of a continuum of suppliers with heterogeneous productivities. An important feature of our model is the endogenously determined, through matching, distribution of surplus in the bargaining problem between two input suppliers, which as we show has a profound effect on organizational design in a market. We study the interplay between market price, firm productivity and firm boundaries. We show that integration decisions can be non-monotonic with respect to firm productivity. Moreover, depending on the market distribution of firm productivities, a higher market price can induce more or fewer firms to integrate. In the latter case, the industry supply curve can be backward-bending. These results generate new empirical implications.
    Keywords: Integration; incomplete contracting; market competition; endogenous matching
    JEL: D21 D23 D41 L11 L14 L22
    Date: 2013–11–26
  5. By: Milena Klasing Chen (CGS - Centre de Gestion Scientifique - MINES ParisTech - École nationale supérieure des mines de Paris)
    Abstract: Low cost products and services are nowadays present in most sectors. However a clear definition of what makes a low cost product seems to be missing. This article proposes a state of the art on low cost products (through the study of a sample of 42 products recognized as "low cost") and aims to develop a framework to classify them through their design principles, to identify their main characteristics, how they emerge, how they are managed, as well as the impact they have on markets. One of the main conclusions of this work is that two main low cost models should be distinguished. They are labeled i) 'low cost adaptation', where the classical products are striped naked of their non-essential functions to reduce costs, following a functionalist design approach; and ii) 'smart low cost design', that develops a less costly new product from scratch answering to consumer needs, and that can be linked to innovative design theories. These two models should not be mixed up with cost efficiencies models, which are also aimed at reducing costs, but are not a company's main strategy. The studied products show that 'smart low cost design' products are more innovative than 'low cost adaptation' products. The second model is richer and uses elements of the first one. Furthermore, similar effects on the market are observed for both low cost product models, like the creation of demand and the overall price reduction, but the second model seems to have a stronger impact. This work illustrates that a low cost approach can be used as a design tool.
    Keywords: low cost; innovation
    Date: 2013–04–19
  6. By: NAGAOKA Sadao; NISHIMURA Yoichiro
    Abstract: This paper empirically investigates the effects of patent thickets. One unique feature of our study is to identify two sources of patent thickets: (1) complementarity as measured by the number of the patents to be used jointly with the focal patent in commercialization, and (2) ownership fragmentation as measured by the number of firms whose patents are cited by an examiner for the granting of the focal patent. There are three major findings. First, there is a significant difference between complex industry sectors and discrete ones regarding complementarity, while the difference regarding fragmentation at the patent level is small. Second, more complementarity is significantly associated with the importance of first mover advantage in research and development (R&D) and (less significantly) with that in commercialization, while fragmentation has little effect on them. Consistent with this finding, complementarity is associated with high patent value. Third, cross licensing motivation significantly accounts for patenting propensity while blocking motivation does not. Complementarity is significantly associated with more patenting for cross licensing, which facilitates both combining the inventions of different firms and preventing the risk of being held up. Furthermore, it does not invite patenting for blocking. Thus, we do not see significantly negative consequences of patent thickets on R&D, as seen by incumbents. At the same time, it is important to pay focus on policy to avoid granting patents to low quality inventions and to facilitate the mechanism of ex-ante contracting in complex industry sectors where patenting motivations are high.
    Date: 2014–01
  7. By: Martin Lábaj (University of Economics in Bratislava, Faculty of National Economy, Department of Economic Policy); Peter Silaniè (University of Economics in Bratislava, Faculty of National Economy, Department of Economic Policy); Christoph Weiss
    Abstract: The present paper provides first empirical evidence on the effects of entry on market conduct for a transition economy. We estimate size thresholds required to support different numbers of firms for seven retail and professional service industries in a large number of distinct geographic markets in Slovakia. Our results suggest a differential impact of entry on market conduct: while market conduct is unaffected by entry in the north-western parts of Slovakia, competition tends to kick in slowly in most professions in the south-east. This latter region suffers from infrastructure bottlenecks and competitors require a larger increase in the number of customers to come in.
    Keywords: entry thresholds, competition, Slovakia, cross section, geographic markets
    JEL: L22 D22 M13 R11
    Date: 2013–01–31
  8. By: Manjong Lee (Department of Economics, Korea University, Seoul, Republic of Korea)
    Abstract: Retailers in the Netherlands and the U.K. can charge different prices for a commodity depending on whether cash or a debit card is used as payment, whereas retailers in the U.S. generally cannot. These two types of economies with and without a uniform pricing constraint for cash and debit card payments are compared in a microfounded monetary model. We place particular emphasis on the distinctive features of cash and debit cards as payment methods: the cost of a cash transaction for the seller is typically lower than that of a debit card, whereas the cost of cash holdings for the buyer is higher than that of a debit card. Our results suggest that a uniform pricing constraint makes cash-holding costs decline but consumption dispersion between the poor and the rich increase. Numerical examples show that the beneficial effect of the constraint dominates its negative effect.
    Keywords: cash, debit card, constrained price, unconstrained price
    JEL: D61 E42 E64
    Date: 2013
  9. By: Harrison, Teresa (School of Economics LeBow College of Business Drexel University); Seim, Katja (Department of Business & Public Policy Wharton School University of Pennsylvania)
    Abstract: Nonprofits are increasingly present in industries with a large for-profit sector, raising questions about their competitive advantage afforded by the nonprofit tax exemption. We estimate an equilibrium model of market structure for recreation/fitness centers to assess whether nonprofit and for-profit firms compete directly for the same customer base. Our results suggest that the two ownership types serve independent markets. Consequently, nonprofits do not meaningfully crowd out for-profit competitors. We find that local property taxes, as a proxy for a firm’s tax burden, significantly affect for-profit entry and that nonprofit entry would fall by 25%, without affecting for-profit entry, if the same property tax liability was imposed.
    Keywords: entry; nonprofit firms; tax exemptions
    JEL: H25 L10 L30
    Date: 2013–12–01
  10. By: Christopher T. Conlon; Julie Holland Mortimer
    Abstract: We study an All-Units Discount, in which a downstream firm pays a linear wholesale price up to a quantity threshold, beyond which a discount applies to all future and previous units. The result of the contract is that marginal cost downstream is effectively negative over a quantity range. Such contracts are common in many industries, and we implement a field experiment in one such industry (confections), in which we remove top-selling products from a market in order to identify the potential efficiency effect of the contract. We combine the experimental variation with a structural model of demand and a dynamic model of the retailer’s re-stocking decision to identify cases in which the contract results in either efficient or inefficient exclusion of competing products. We show how the contract allocates the cost of a stock-out between upstream and downstream firms, and find evidence of inefficient exclusion. Finally, we point out that the impact of upstream mergers in these markets is likely to be felt not through the price in the final-goods market, but rather in the wholesale market. We examine the impact of various upstream mergers on the willingness of the dominant firm to offer rebate contracts, and the impact that the rebate contracts have on social welfare.
    JEL: L0 L4 L42
    Date: 2013–12
  11. By: Gambaro, Marco; Puglisi, Riccardo
    Abstract: During the last decade the internet has been the fastest growing segment in advertising. Exploiting Nielsen data, we analyze the advertising pattern displayed by the population of organizations (i.e. companies, non-profit institutions and public entities) that were active on the Italian national market during the period 2005-2009. Some reduced form evidence shows that - during this time period - smaller firms increased their ads investment on newspapers, magazines cinema comparatively more than larger firms. Radio and the internet display an opposite pattern, whereas are larger firms increasing their expenses more than smaller firms. In the lack of firmspecific output data, we also estimate a homothetic advertising cost function for different subsets of the sample. We find that media segments are (loose) substitutes, in that the estimated cross-price elasticities are positive but decidedly less than one. --
    Keywords: Advertising,Internet,Media Substitution
    JEL: L2 L82 L86
    Date: 2013
  12. By: Kocsis, Viktória
    Abstract: Network operators of competing infrastructures in European electronic communications markets face asymmetric regulation: incumbent telecommunications firms are required to open their networks for retail broadband competition, while cable companies have no such obligation. Furthermore, for historical reasons, cable companies have better quality networks thanks to the DOCSIS 3.0 technology than DSL-based telecom firms. How would the market structure of electronic communications markets and the quality of networks develop in the presence of asymmetric regulation and original quality differences? Based on a location model for product differentiation, i find that access revenues can compensate incumbent telecom firms for the loss due to having a lower quality network than cable companies. Therefore, access obligation reduces the incentives of telecom firms to compete with cable companies by upgrading network quality. In the absence of retail competitors without networks, however, telecom firms need to upgrade network quality to be able to remain competitive with cable companies. Furthermore and in line with the existing literature, the exclusion of retail competitors is more likely in the presence of higher access prices and stronger substitutuion between firms' products. Finally, if the original differences between network quality is large and high returns on investments are unlikely, telecom firms may not be able to invest sufficiently and lose substantially from their market shares. --
    Keywords: Telecommunications,Investments,Quality,Access regulation,Asymmetric regulation
    JEL: L51 L96 L10 K23
    Date: 2013
  13. By: Valcke, Peggy; Wahyuningtyas, Sih Yuliana; Graef, Inge
    Abstract: [Introduction] Since several years companies in the internet economy have been offering online media platforms such as YouTube, Google and Facebook. These platforms are multi-sided markets. Instead of targeting one customer group, platform providers are competing for users, advertisers and developers. The fact that the platforms are offered exclusively on the internet, distinguishes them from other multi-sided markets such as the newspaper industry. Furthermore, contrary to ‘traditional’ companies in the information technology sector like Intel and Microsoft, platform providers do not bring their technology to the market but rely on deriving benefits from valuable information they collect about their users. By preventing users from exporting their data to competing platforms and by blocking competitors from accessing the user data on their platforms, these providers may gain such a powerful position allowing them to control the market to the detriment of effective competition and consumer welfare. This paper aims to analyze how European competition law may intervene to redress access problems in these multi-sided markets. In the first part of the paper, economic literature on two-sided markets will be studied in order to analyze how the multi-sided nature of online media platforms impacts the legal assessment of anticompetitive behaviour. The analysis on competition law issues will highlight market definition for multi-sided platforms, multi-sided nature and access to users, and merger assessment. In the second part of the paper, a comparative law approach will be used to study how European competition law can approach access issues in online media platforms. While there is no decision or judgment on these issues yet in the European Union, a few private antitrust cases dealing with these problems have already occurred in the United States. The US cases will be discussed and it will be analyzed whether EU competition authorities and courts will take the same approach. --
    Date: 2013
  14. By: Baglioni, Laura; Calabrese, Armando; Ghiron, Nathan Levialdi
    Abstract: This paper analysis the Internet interconnection market and combine the main technical (i.e. service quality) and economic aspects (i.e. profits and utility) characterizing relations between market players (end users, EUs; Internet Service Providers, ISPs; Internet Backbone Providers, IBPs) in order to determine possible economic outcomes in the strategic interaction between them. The proposed model enables a comparison to be made between expected values of social welfare (i.e. EU utility and profits of both ISPs and IBPs) on the current scenario (Best Effort) and considering two classes of priority in the traffic routing. Finally we illustrate the model's applicability to an example of network. --
    Keywords: Net Neutrality,pricing,competition,service quality,Internet interconnection
    Date: 2013
  15. By: Briglauer, Wolfgang
    Abstract: Fibre deployment of next-generation high-speed broadband networks is considered to be a decisive development for any information-based society, yet investment activities and especially the adoption of fibre-based broadband services take place only very gradually in most countries. This work employs static and dynamic model specifications and identifies the most important determinants of the adoption of fibre-based broadband services with recent panel data from the European Union member states for the years from 2004 to 2012. The results show that the more effective previous broadband access regulation is, the more negative the impact on adoption, while competitive pressure from mobile networks affects adoption in a non-linear manner. It appears that the approach of strict cost-based access regulation embedded in the EU regulatory framework is at odds with the targets outlined in the European Commission's Digital Agenda. Finally, we also find evidence for substantial network effects underlying the adoption process. --
    Keywords: Next-generation telecommunications networks,regulation,competition,adoption,network effects
    Date: 2013
  16. By: Knieps, Günter; Zenhäusern, Patrick
    Abstract: International mobile roaming cartel agreements prompted the EU to intervene, firstly encompassing competition law measures by a cartel exemption, then initiating several competition proceedings based on the accusation of abuse of a dominant market position, and finally applying price regulations of increasing scope. The paper exposes the temporary market power regulations, including the designated local break out measures, as insufficient and misleading. The solution is to solve the cartel problem at its root, permitting visiting customers the freedom of choosing between their home operator and alternative carriers from the visited country by the implemention of carrier portability. --
    JEL: K21 L51 L96
    Date: 2013
  17. By: Madden, Gary; Bohlin, Erik; Tran, Thien; Morey, Aaron
    Abstract: Competition policy attempts to address the potential for market failure by encouraging competition in service markets. Often, in wireless communication service markets, national regulatory authorities seek to encourage entry via the spectrum assignment process. Instruments used include the assignment mode (auction or beauty contest), setting aside licenses and providing bidding (price and quantity) credits for potential entrants, and making more licenses (spectrum blocks) available than incumbent firms (excess licenses). The empirical analysis assesses the effectiveness of these policy instruments on encouraging entry. The econometric results show that the probability of entry is enhanced by using auction assignments and excess licenses. Furthermore, quantity, but not price, concessions encourage entry. --
    Keywords: spectrum licensing,policy instruments, market entry
    JEL: D82 L51 L96
    Date: 2013
  18. By: Csorba, Gergely; Pápai, Zoltán
    Abstract: This paper estimates the impact of entries and mergers on the price of mobile voice services in a panel database of 27 European Member States between 2003 and 2010. Our difference-in-differences econometric methodology exploits the variance in different structural changes between countries to separate the respective effects. Our results show that the effect of entry crucially depends on the number of active operators and the type of entrant, and not controlling for these differences might lead to misleading conclusions. We find no robust evidence that entry has a price-decreasing effect on markets with originally 2 operators. However, the entry of a 4th operator does have a price-decreasing effect, but with different dynamics concerning the entrant's type. When we separate entry effects for the subsequent years, we show that the significant price-decreasing effects for local operators entering occur only in the first year after entry, while the price-decreasing effects for multinational entries are significantly larger on the long-run. Last, we find no price-increasing effects of 5-to-4 mergers, but a long run price-increasing effect of a 4-to-3 merger. --
    Keywords: ex-post evaluation,mobile telecommunications,entry,merger,difference-in-differences estimations
    JEL: L11 L49 L59 L96
    Date: 2013
  19. By: Neumann, Karl-Heinz; Vogelsang, Ingo
    Abstract: In many countries worldwide access networks are in the transition from copper to fiber access. During the transition phase copper and fiber networks are operated in parallel. All regulators facing this situation of technological change have to decide how to price unbundled access to the copper loop in this transition phase. Should they keep the usual forward looking long-run incremental cost standard charge, or should they move to some different approach? The authors propose to price copper access based on the modern equivalent asset (MEA) of fiber access. Since fiber access is superior to copper access, the cost of fiber access (as a basis for pricing copper access) should, however, be corrected by the performance delta between copper and fiber access. Instead of using quality of service (QoS) differences, the authors determine the performance delta based on the market valuation of services provided over the copper and fiber access represented by the end-user prices of services and corrected by cost differences downstream of the access provision. Under this approach an access seeker becomes indifferent (on the margin) between using the copper or the fiber access network and wholesale pricing (or regulation) becomes competitively neutral towards technology choice between copper and fiber access and does not distort the platform competition towards cable. To test its practicability numerical simulations of the approach are performed by means of a quantitative competition model. The model analysis suggests that the approach leads to unique and robust results. Its main conclusion is that the method tends to be conservative relative to the theoretical case of pure vertical product differentiation, meaning that the measured performance delta underestimates the theoretical performance delta. --
    Keywords: Copper access,Fiber to the home (FTTH),Modern equivalent asset,Long-run incremental costs (LRIC),Performance delta
    Date: 2013
  20. By: Czajkowski, Mikołaj; Sobolewski, Maciej
    Abstract: In this paper we utilize discrete choice experiment method to identify and measure switching costs and network effects in mobile telephony in Poland. Based on hypothetical choices consumers make we construct a conditional random parameters multinomial logit model to analyze their preferences. In our choice design we explicitly account for status quo inertia, number portability, operator brand, network distribution of most frequently called parties and price of on-net and off-net calls. Stated preference approach allows us to calculate marginal rates of substitution and hence implicit prices of the non-price attributes used to describe choices and switching behavior. Results of our study indicate that although choices of mobile operators are largely driven by price of calls, switching costs and network effects have and strong impact on utility of subscribers. In particular users assign positive value to their mobile phone number and the size of family and friends group in the same network. The monetary value of phone number is significantly higher among individual entrepreneurs then residential subscribers. In our model switching behavior is not discouraged by brand loyalty which turned out to be insignificant. Instead subscribers follow status quo inertia which reflects uncertainty associated with new operator. Therefore we conclude that despite introduction of mobile number portability, switching costs continue to be an important issue in telecommunications markets. On recommendations level, we argue that regulatory and competition policies should continue to reduce uncertainty associated with changing operator by ensuring service and platform compatibility and reducing tariff complexity. In light of our results we recommend tariffs to be non-discriminatory so that operators are unable to utilize network effects in a way which discourages switching behavior. --
    Keywords: Switching costs,network effects,mobile telecommunications,mobile number portability,brand valuation,stated preference methods,non-market valuation methods,choice experiment,multinomial conditional logit model,random parameters model
    JEL: L1 L86 O3
    Date: 2013
  21. By: Lee, Hyun Joo; Kim, Jin Ki
    Abstract: Competition in the mobile market is centered on platforms, or operating systems, for smartphones. The current competition and market structure of the global mobile market has shifted to a competition among ecosystems that utilize the same mobile operating systems of the platform operators. This paper aims to answer those questions. The direction of competition in the smartphone industry is traced. This study tries to list the selectable strategy options for each major ecosystem. Then the strategy options for each ecosystem are tested in terms of their desirability from the viewpoint of industry experts. Finally, this study tries to put the puzzle together based on the most desirable strategy options for each ecosystem. --
    Date: 2013
  22. By: Wulf, Jochen; Brenner, Walter
    Abstract: [Introduction] The diffusion of mobile broadband, which use cellular mobile communication technology, is at an advanced state in many countries. It is, however, unclear how mobile broadband diffusion affects other broadband services, and fixed broadband access in particular. Following the definition of ITU (2012) we define broadband as a high speed access to the Internet with download speeds of greater or equal to 256 kbit/s. Fixed broadband includes wired technologies such as cable, DSL and FTTH.1 Mobile broadband enables a non-stationary Internet access based on cellular mobile communication technologies (such as LTE, UMTS or WIMAX). Competitive effects between different broadband access technologies are of high importance for regulation as well as for competitive strategy: With regard to regulations, technology platform competition can have an effect on the competitive behavior in the individual markets. With regard to competitive strategy, competitive or complementarity effects between different access technologies significantly determine the success of service bundeling strategies. The goal of our research is twofold. Firstly, want to gain a deeper understanding of how mobile and fixed broadband diffusion affect each other based on the latest country level panel data (ITU 2012, World Bank 2013). A second objective of our research is to deepen the understanding of factors moderating the competitive relationship between fixed and mobile broadband. We therefore present a methodology for moderation analysis and exemplarily demonstrate its application. The paper is structured as follows. The related research is presented in the following section. The third section addresses the models, data and methodology of analysis. Thereafter, the results of the competition and the moderation analyses are presented and discussed. The conclusions section discusses limitations and next research steps. --
    Date: 2013
  23. By: Mölleryd, Bengt G.; Markendahl, Jan
    Abstract: This paper focuses on network sharing on mobile networks and examines the impact on profitability and competition. Network sharing refers to that operators collaborates with its competitors on part of the production of mobile services, and it could vary from passive sharing, like sharing of sites or basic facilities, to active sharing, like radio access networks or even entire networks. The paper takes a global scope on examining the extent of network sharing. The emergence of a sector with dedicated infrastructure or tower companies are documented through a mapping of listed companies' which facilities a detailed financial analysis. The rationale for network sharing could be grouped into three factors: 1) lower cost and reduce capital spending as well as to raise capital, 2) improve coverage and services, and 3) reduce the negative impact on the environment. The increased usage of network sharing throughout the world signals that it is going to develop and in the longer run move focus from infrastructure based to service based competition. Although operators have been able to lower network operation cost the impact on profitability varies. The dedicated tower and infrastructure companies manage considerable higher debt ratios compared to operators potentially having a transformative impact on the operator business. Despite an extensive usage of network sharing - where competitors are collaborating - competition on the retail market prevails. A potential spillover effect from network collaboration to the downstream market is a risk, but the social benefit with larger coverage and improved capacity has so far given extensive support for network sharing. --
    Keywords: Network sharing,mobile network operators,infrastructure,tower companies,operational and capital expenditures,competition,profitability,financial gearing
    Date: 2013
  24. By: Keesookpun, Chutipong; Mitomo, Hitoshi
    Abstract: This paper presents the analyses of the determinants of mobile carrier switching behaviour based on the idea that such the behaviour is the evidence of competition in the mobile market. Indeed, with the possibility to change a mobile service provider, there will be less concentration of customers towards any particular operator, and more distribution of market share among all competitors because the newcomer company can offer its competitive services and gain more subscribers. In order to extract the factors affecting switching decision, both quantitative and qualitative analyses are employed. Binary logit estimation is used as the quantitative method, while qualitative outcomes are derived from the composition of responses regarding carrier switching intention. This study uses a modified estimation model incorporating carrier-related switching costs inspired by Grzybowski (2008). Nevertheless, it is the analysis of a developing country in which Thailand is selected as ground for investigation. The data is collected from surveys randomly distributed within the whole country... --
    Date: 2013
  25. By: Silva, Rita Filipe; Proença, Isabel; Vareda, João
    Abstract: The development of the broadband market is a key aspect of the economic and social growth of a country. However, despite the importance and the development of broadband market in Portugal in recent years, especially with the explosion of the number of mobile broadband accesses, the studies for the Portuguese case are rare. The present paper seeks to contribute to the discussion about the definition of the broadband market in Portugal, specifically studying the demand for broadband Internet and measuring the determinants that explain the use of each of the technologies available to provide broadband access, with emphasis on the differences between fixed and mobile accesses. Demand broadband functions were estimated using nested logit and multinomial discrete choice model. The primary source of information was ANACOM's Electronic Communications Services Consumption Survey, complemented with price information regarding the offers available in the market. The estimations obtained for the elasticities point out the probable existence of substitution between ADSL and cable and between these fixed broadband technologies and the mobile broadband. However, the inverse relation is not statistically significant, the demand for mobile broadband isn't constrained by the price of ADSL or of cable, which may reveal the existence of asymmetric substitution between fixed and mobile broadband accesses. These results have implications in the definition of the broadband market in Portugal which will be discussed. --
    Keywords: Broadband,Market Definition,Demand,Regulation,Fixed-Mobile Substitution
    JEL: L51 L96
    Date: 2013

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