nep-ict New Economics Papers
on Information and Communication Technologies
Issue of 2017‒10‒29
two papers chosen by
Walter Frisch
Universität Wien

  1. Freemium Internet: Next Generation Business Model to connect next billion By Esselaar, Steve; Song, Steve; Stork, Christoph
  2. Speeding Up the Internet: Regulation and Investment in European Fiber Optic Infrastructure By Briglauer, Wolfgang; Cambini, Carlo; Grajek, Michał

  1. By: Esselaar, Steve; Song, Steve; Stork, Christoph
    Abstract: This paper analyses a business model for providing free basic-rate Internet to everyone with a data capable phone, living in mobile coverage areas. The model is called Freemium Internet. The term "freemium" refers to a well-known business model for digital services, where free services or applications provide basic functions and more advanced functions are available by paying a fee. We examine the impact of applying the freemium business model to the provision of mobile Internet access and discuss net neutrality issues, mobile operator strategies, benefits for consumers, and the potential impact on government e-service programmes. The paper further investigates policy options and regulatory incentives to facilitate the adoption of Freemium Internet.
    Keywords: Universal Service,Next Billion,business models
    Date: 2017
  2. By: Briglauer, Wolfgang; Cambini, Carlo; Grajek, Michał
    Abstract: In this paper, we study how the coexistence of access regulations for legacy (copper) and fiber networks shapes the incentives to invest in network infrastructure. To this end, we develop a theoretical model explaining investment incentives by incumbent telecom operators and heterogeneous entrants and test its main predictions using panel data from 27 EU member states over the last decade. Our theoretical model extends the existing literature by, among other things, allowing for heterogeneous entrants in internet access markets, as we consider both other telecom and cable TV operators as entrants. In the empirical part, we use a novel data set including information on physical fiber network investments, legacy network access regulation and recently imposed fiber access regulations. Our main finding is that more stringent access regulations for both the legacy and the fiber networks have, in line with our theoretical model, an asymmetric effect on incumbent telecom and cable TV operators; both harm investments by the former, but do not affect the latter.
    Keywords: Internet access market,Access regulation,Investment,Infrastructure,Next Generation Networks,Broadband,Telecoms,Cable operators and Europe
    JEL: L96 L51
    Date: 2017

This nep-ict issue is ©2017 by Walter Frisch. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.