Evaluating a Decade of Mobile Termination Rate Regulation

30 Pages Posted: 11 Jan 2014 Last revised: 17 Feb 2015

See all articles by Christos Genakos

Christos Genakos

Cambridge Judge Business School; Athens University of Economics and Business (AUEB); Center for Economic Policy Research (CEPR); Center for Economic Performance (CEP)

Tommaso M. Valletti

Imperial College Business School; Centre for Economic Policy Research (CEPR)

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Date Written: December 10, 2013

Abstract

We re-consider the impact that regulation of call termination on mobile phones has had on mobile customers’ bills. Using a large panel covering 27 countries, we find that the “waterbed” phenomenon, initially observed until early 2006, has disappeared over the 10-year period, 2002-2011. We argue that this is due to the changing nature of the industry, whereby mobile-to-mobile traffic now plays a much bigger role compared to fixed-to-mobile calls in earlier periods. This implies that regulation does not have unintended consequences anymore. Over the same decade, there is no evidence that regulation caused a reduction in mobile operators’ profits and investments.

Suggested Citation

Genakos, Christos and Valletti, Tommaso M., Evaluating a Decade of Mobile Termination Rate Regulation (December 10, 2013). CEIS Working Paper No. 303. Available at SSRN: https://ssrn.com/abstract=2377341 or http://dx.doi.org/10.2139/ssrn.2377341

Christos Genakos

Cambridge Judge Business School ( email )

Trumpington Street
Cambridge, CB2 1AG
United Kingdom

Athens University of Economics and Business (AUEB) ( email )

76 Patission Street
Athens, 104 34
Greece

HOME PAGE: http://www.aueb.gr/users/cgenakos

Center for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Center for Economic Performance (CEP) ( email )

Houghton Street
London WC2A 2AE
United Kingdom

Tommaso M. Valletti (Contact Author)

Imperial College Business School ( email )

South Kensington Campus
Exhibition Road
London SW7 2AZ, SW7 2AZ
United Kingdom

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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