Evaluating Market Consolidation in Mobile Communications

72 Pages Posted: 26 Jun 2017

See all articles by Christos Genakos

Christos Genakos

Cambridge University; Centre for Economic Performance (CEP)

Tommaso M. Valletti

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

Frank Verboven

KU Leuven

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Date Written: June 08, 2017

Abstract

We study the dual relationship between market structure and prices and between market structure and investment in mobile telecommunications. Using a uniquely constructed panel of mobile operators’ prices and accounting information across 33 OECD countries between 2002 and 2014, we document that more concentrated markets lead to higher end user prices. Furthermore, they also lead to higher investment per mobile operator, though the impact on total investment is not conclusive. Our findings are not only relevant for the current consolidation wave in the telecommunications industry. More generally, they stress that competition and regulatory authorities should take seriously the potential trade-off between market power effects and efficiency gains stemming from agreements between firms.

Keywords: Mobile Telecommunications, Market Structure, Prices, Investments, Mergers

JEL Classification: K200, L100, L400, L960

Suggested Citation

Genakos, Christos and Valletti, Tommaso M. and Verboven, Frank, Evaluating Market Consolidation in Mobile Communications (June 08, 2017). CESifo Working Paper Series No. 6509. Available at SSRN: https://ssrn.com/abstract=2992480

Christos Genakos

Cambridge University ( email )

Austin Robinson Building
Sidgwick Avenue
Cambridge, CB3 9DD
United Kingdom

Centre 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

Frank Verboven

KU Leuven ( email )

Oude Markt 13
Leuven, Vlaams-Brabant 3000
Belgium

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