On Subscriber- and Traffic Based Preponderance
7 Pages Posted: 6 Nov 2015
Date Written: July 13, 2015
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: Suggested Citation