Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/18351 
Year of Publication: 
2005
Series/Report no.: 
DIW Discussion Papers No. 500
Publisher: 
Deutsches Institut für Wirtschaftsforschung (DIW), Berlin
Abstract: 
We model competition between two unregulated mobile phone companies with price-elastic demand and less than full market coverage. We also assume that there is a regulated full-coverage fixed network. In order to induce stronger competition, mobile companies could have an incentive to raise their reciprocal mobile{to{mobile access charges above the marginal costs of termination. Stronger competition leads to an increase of the mobiles' market shares, with the advantage that (genuine) network effects are strengthened. Therefore, `collusion' may well be in line with social welfare.
Subjects: 
telecommunication
mobile phones
mobile-to-mobile access charges
network effects
JEL: 
L41
L96
Document Type: 
Working Paper

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