Zusammenfassung:
Submarine cables enable international connectivity and are essential for high- speed internet access. This paper examines their impact on internet access price, focusing on price reductions driven by cost savings and competition intensity. Using a dataset of submarine cable capacity and internet access prices across 150 countries over 12 years, and following an instrumental variable approach, the analysis finds that a doubling of submarine cable capacity reduces internet prices by 30-50 percent, with regional disparities. In fixed broadband markets, market concentration initially lowers prices, reflecting economies of scale, but raises them in the long term, a dynamic less evident in mobile broadband markets. Telecom market regulations, particularly those em- powering regulators to oversee competition, infrastructure sharing, and consumer protection, amplify these effects. The findings are robust to adopting a staggered difference-in-differences framework.
