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Autor:innen: 
Erscheinungsjahr: 
2025
Schriftenreihe/Nr.: 
ITS 33rd European Conference 2025: "Digital innovation and transformation in uncertain times", Edinburgh, UK, 29th June – 1st July 2025
Versionsangabe: 
This version: October 28, 2025
Verlag: 
International Telecommunications Society (ITS), Calgary
Zusammenfassung: 
This paper examines how the rise of Over-the-Top (OTT) or Content and Application Provider (CAP) services reshapes the revenue and investment behavior of telecommunications operators in mobile and fixed broadband markets. A micro-founded theoretical framework links OTT engagement to operators’ pricing and investment incentives, and the predictions are tested empirically using a multi-country quarterly panel (2017 Q3–2024 Q2) combining operator and application-level data. The empirical strategy combines multi-way fixed effects, shift-share instrumental variables (SSIV), and dynamic System GMM estimation to address endogeneity and persistence. Results show that greater OTT usage significantly lowers the average revenue per connection (ARPC) in mobile markets. As users access identical OTT platforms through any network, perceived differentiation between operators vanishes. Price competition intensifies under flat-rate plans, preventing operators from monetizing growing data traffic and leading to revenue dilution. In contrast, the effect on fixed broadband ARPU remains weak, reflecting cost-based pricing and utility-type demand. On the investment side, rising OTT traffic increase capital expenditure (CapEx) as operators expand network capacity. In European mobile markets, investment follows an inverted-U pattern with market concentration, peaking at intermediate levels. Revenue losses from OTT usage are also less pronounced in moderately concentrated markets but stronger in fragmented ones. Overall, OTT expansion erodes monetization while compelling operators to invest to sustain rising traffic. This structural tension exposes a trade-off between static efficiency, constrained by declining revenues, and dynamic efficiency, preserved through continued investment. Policy frameworks should balance competition, pricing flexibility, and value sharing between connectivity and content providers.
Schlagwörter: 
Telecommunication
Two-sided market
Big Tech
CAP
OTT
JEL: 
D71
L51
K23
L86
L93
O32
O33
Dokumentart: 
Conference Paper
Dokumentversion: 
Published Version

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2 10419/331303.2 This version: October 28, 2025
1 10419/331303 First version: May 26, 2025

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