Empirical evidence on the relationship between mobile termination rates and firms' profit
Working paper
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http://hdl.handle.net/11250/164203Utgivelsesdato
2012-08Metadata
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Sammendrag
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.