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Empirical evidence on the relationship between mobile termination rates and firms' profit

Andersson, Kjetil; Foros, Øystein; Hansen, Bjørn
Working paper
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URI
http://hdl.handle.net/11250/164203
Date
2012-08
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  • Discussion papers (FOR) [509]
Abstract
The comprehensive theoretical literature on mobile termination rates (MTRs) is

inconclusive on how the level of MTRs affects overall consumer charges and firms’

profit. In a theoretical model, well suited for econometric implementation, we show

that where consumers buy a bundle with included usage, as we now observe in the

market, the level of MTRs has no impact on retail prices and firms’ profit. We use a

panel data set from saturated European markets and find that an identical change in

MTRs does not have a significant impact on firms’ profit.
Publisher
Norwegian School of Economics. Department of Finance and Management Science
Series
Discussion paper;2012:10

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