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Mobile Call Termination

38 Pages Posted: 27 May 2009  

Mark Armstrong

University College London - Department of Economics

Julian Wright

National University of Singapore (NUS) - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: 0000

Abstract

We analyse charges levied by mobile telephone networks to deliver calls. We integrate two literatures: one analysing calls from the fixed network, where predicted unregulated termination charges are too high, and one analysing calls from rival mobile networks, where predicted charges are too low. In practice, however, networks adopt uniform charges for terminating both kinds of traffic, as do regulators. We show how incorporating wholesale arbitrage and demand-side substitution helps to reconcile theory with practice. In our framework, the unregulated charge is uniform and typically lies between the efficient and monopoly benchmarks. There remains a rationale for regulation, albeit reduced.

Suggested Citation

Armstrong, Mark and Wright, Julian, Mobile Call Termination (0000). The Economic Journal, Vol. 119, Issue 538, pp. F270-F307, June 2009. Available at SSRN: https://ssrn.com/abstract=1410308 or http://dx.doi.org/10.1111/j.1468-0297.2009.02276.x

Mark Armstrong

University College London - Department of Economics ( email )

Gower Street
London WC1E 6BT, WC1E 6BT
United Kingdom

Julian Wright

National University of Singapore (NUS) - Department of Economics ( email )

AS2 Level 6, 1 Arts Link
Singapore 117570
Singapore
6568743941 (Phone)
6567752646 (Fax)

HOME PAGE: http://profile.nus.edu.sg/fass/ecsjkdw/

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