Mobile only users powered by fixed-mobile substitution
In a context of partial
fixed-mobile substitution, we analyze
fixed-mobile bundling and mobile-to-
fixed off-loading in a duopoly model in which consumers buy one or two products. A joint purchase discount mitigates
fixed-mobile substitutability and consequently reduces mobile-only and fixed-only consumers. Practises like introducing a small discount, applied on a bundle of multiple service or mobile-to-
fixed offloading by both operators are analysed. We
nd that such practises do not have negative impacts on the profi
ts of whole market and lead to both consumers' surplus and welfare gains. The investment incentives in
xed network are positive and can be boosted by FM bundling without considering regulatory intervention and before taking into account of
fixed costs. The investment incentives in mobile network are more likely a situation of prisoners' dilemma where operators should invest as long as there are mobile-only consumers.
Year of publication: |
2012
|
---|---|
Authors: | Liangy, Julienne ; Petulowa, Marc |
Institutions: | International Telecommunications Society (ITS) |
Saved in:
freely available
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