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Demand-side spillovers and semi-collusion in the mobile communications market

Foros, Øystein; Hansen, Bjørn; Sand, Jan Yngve
Working paper
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URI
http://hdl.handle.net/11250/162998
Date
2001-12
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  • Discussion papers (SAM) [586]
Abstract
We analyze roaming policy in the market for mobile telecommunications. Firms

undertake investments in network infrastructure to increase geographical coverage, capacity

in a given area, or functionality. Prior to investments, roaming policy is determined. We show

that under collusion at the investment stage, firms' and a benevolent welfare maximizing

regulator's interests coincide, and no regulatory intervention is needed. When investments are

undertaken non-cooperatively, firms' and the regulator's interests do not coincide. Contrary to

what seems to be the regulator’s concern, firms would decide on a higher roaming quality

than the regulator. The effects of allowing a virtual operator to enter are also examined.

Furthermore, we discuss some implications for competition policy with regard to network infrastructure investment.
Publisher
Norwegian School of Economics and Business Administration. Department of Economics
Series
Discussion paper
2001:32

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