On Subscriber- and Traffic Based Preponderance

7 Pages Posted: 6 Nov 2015

See all articles by Federico Kuhlmann

Federico Kuhlmann

Instituto Tecnológico Autónomo de México (ITAM)

Enrique Melrose

Instituto Tecnológico Autónomo de México (ITAM)

Date Written: July 13, 2015

Abstract

After the enactment of the Constitutional Reform in Telecommunications in Mexico, followed a few months later by the Federal Telecommunications and Broadcasting Law, one of the concepts that has stirred much controversy within the Mexican telecommunications industry is the one of a “preponderant economic agent”. Controversy is originated by the facts that a declaration of preponderance is given not for single services, but for a whole industry, and by the two sided definitions of preponderance: it can be based on a market share larger than 50% of the subscribers, or it on more than 50% of the traffic in the networks. Since preponderance will likely trigger special regulations for preponderant agents, these could be interested in strategies which could help them lose this characteristic. In this paper we present a method to quantify and compare the traffics handled by the operators, we develop a model for this purpose and we draw conclusions based on various hypotheses. Preliminary results show that there exist situations, in which a number-of-subscribers based preponderant agent, could get rid of some portion of its customer base, so as to lose its preponderance status, but retain this status and still be preponderant, if preponderance is based on volume of traffic.

Keywords: Preponderance, market share, asymmetric regulation, competition

JEL Classification: L96, R48

Suggested Citation

Kuhlmann, Federico and Melrose, Enrique, On Subscriber- and Traffic Based Preponderance (July 13, 2015). Proceedings of the 9th CPRLatam Conference, Cancun, July 13-14th, 2015. Available at SSRN: https://ssrn.com/abstract=2687159

Federico Kuhlmann (Contact Author)

Instituto Tecnológico Autónomo de México (ITAM) ( email )

Av. Camino a Sta. Teresa 930
Col. Héroes de Padierna
Mexico City, D.F. 01000, Federal District 01080
Mexico

Enrique Melrose

Instituto Tecnológico Autónomo de México (ITAM) ( email )

Av. Camino a Sta. Teresa 930
Col. Héroes de Padierna
Mexico City, D.F. 01000, Federal District 01080
Mexico

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