Competition between Standards and the Prices of Mobile Telecommunication Services: Analysis of Panel Data

11 Pages Posted: 2 Apr 2015 Last revised: 15 Dec 2015

See all articles by Eun-A Park

Eun-A Park

Western State Colorado University

Krishna Jayakar

Pennsylvania State University

Date Written: March 31, 2015

Abstract

This paper aims to address the differential effect of intra-standard and inter-standard competition on the prices of mobile telecommunication services, specifically in 3G and beyond. It is hypothesized that inter-standard competition will lower price over time after controlling for per capita GDP, preference diversity, and mobile teledensity. A fixed effects model was estimated using the least squares dummy variable (LSDV) method to empirically test the association, using ARPU as a proxy for price. The findings were inconclusive because though the direction of the effect suggested that standards competition might be reducing prices, it was not significant. Strong time trends in the data and hedging strategies, in which companies deploy multiple standards, might account for the observed weak effects.

Keywords: de jure standard, de facto standard, intra-standard competition, inter-standard competition, prices of mobile telecommunication services

Suggested Citation

Park, Eun-A and Jayakar, Krishna, Competition between Standards and the Prices of Mobile Telecommunication Services: Analysis of Panel Data (March 31, 2015). TPRC 43: The 43rd Research Conference on Communication, Information and Internet Policy Paper. Available at SSRN: https://ssrn.com/abstract=2588224 or http://dx.doi.org/10.2139/ssrn.2588224

Eun-A Park

Western State Colorado University ( email )

600 N Adams St.
Gunnison, CO 81230
United States
203-214-6822 (Phone)

Krishna Jayakar (Contact Author)

Pennsylvania State University ( email )

University Park
State College, PA 16802
United States

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