The Effects of Regulation Mobile Termination Rates for Asymmetric Networks

16 Pages Posted: 13 Oct 2005

See all articles by Ralf Dewenter

Ralf Dewenter

University of the Federal Armed Forces Hamburg - Department of Economics

Justus Haucap

Heinrich Heine University Dusseldorf - Department of Economics; German Institute for Economic Research (DIW Berlin)

Abstract

This paper examines mobile termination fees and their regulation when networks are asymmetric in size. It is demonstrated that with consumer ignorance about the exact termination rates (a) a mobile network's termination rate is the higher the smaller the network's size (as measured through its subscriber base) and (b) asymmetric regulation of only the larger operators in a market will, ceteris paribus, induce the smaller operators to increase their termination rates. The results are supported by empirical evidence using data on mobile termination rates from 48 European mobile operators from 2001 to 2003.

Keywords: mobile termination, telecommunications, consumer ignorance, price regulation

JEL Classification: L13, L51, L96

Suggested Citation

Dewenter, Ralf and Haucap, Justus, The Effects of Regulation Mobile Termination Rates for Asymmetric Networks. European Journal of Law and Economics, Vol. 20, pp. 185-197, 2005. Available at SSRN: https://ssrn.com/abstract=458222 or http://dx.doi.org/10.2139/ssrn.458222

Ralf Dewenter

University of the Federal Armed Forces Hamburg - Department of Economics ( email )

Holstenhofweg 85
Hamburg, 22043
Germany

Justus Haucap (Contact Author)

Heinrich Heine University Dusseldorf - Department of Economics ( email )

Duesseldorf
Germany

HOME PAGE: http://www.dice.uni-duesseldorf.de

German Institute for Economic Research (DIW Berlin) ( email )

Mohrenstra├če 58
Berlin, 10117
Germany

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