Abstract and Keywords
This article, which covers the recent advances in the economics of mobile telephony, first deals with specific market forces and how they shape competitive outcomes. It then investigates the regulation of certain wholesale and retail prices, closely following regulatory practice. Competition in mobile telephony is usually characterized by the presence of a fairly small number of competitors. Competition for market share is fierce, which benefits consumers through lower subscription fees. It is clear that with more networks, consumers will benefit from termination rates closer to cost. “Traffic management” technologies have made it possible to direct mobile phones to roam preferentially onto specific networks. While regulation has been employed to termination rates, and also international mobile roaming, no such intervention appears likely concerning retail prices. Mobile networks' business model may change from mainly providing calls and text messages to providing access to content to users.
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