MTR Reduction: The Impact on Effective Competition Conditions in Telecommunication

Abstract

Based on a model proposed by De Bijl and Peitz (2002) and calibrated with data from the Mexican Telecommunication market, we build some counterfactuals that allow us to evaluate three different regulatory approaches for using the MTR as an instrument to create effective competition conditions in the mobile telecommunication market. We found that the asymmetric regulation of interconnection rate is a better way to promote effective competition conditions and raise the competitiveness of service providers in the telecommunications sector for the benefit of consumers.

Keywords: Asymmetric regulation, Mobile Termination Rate, Symmetric Regulation

JEL Classification: L86