38 Pages Posted: 27 May 2009
Date Written: 0000
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: 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
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