[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/zbw/dicedp/49.html
   My bibliography  Save this paper

How large is the magnitude of fixed-mobile call substitution? Empirical evidence from 16 European countries

Author

Listed:
  • Barth, Anne-Kathrin
  • Heimeshoff, Ulrich
Abstract
This paper investigates the degree of fixed-mobile call substitution (FMCS). We use quarterly data from 2004 to mid 2010 on 16 mainly Western European countries. By applying dynamic panel data techniques, we are able to estimate short-and long-run elasticities. The own-price and cross-price elasticities found give strong empirical evidence for substitutional effects towards mobile services. In particular, the estimated cross-price elasticities of the mobile price on the fixed line call demand are relatively large compared to other studies.

Suggested Citation

  • Barth, Anne-Kathrin & Heimeshoff, Ulrich, 2012. "How large is the magnitude of fixed-mobile call substitution? Empirical evidence from 16 European countries," DICE Discussion Papers 49, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    • Handle: RePEc:zbw:dicedp:49
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/57826/1/715313932.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Gruber, Harald & Verboven, Frank, 2001. "The evolution of markets under entry and standards regulation -- the case of global mobile telecommunications," International Journal of Industrial Organization, Elsevier, vol. 19(7), pages 1189-1212, July.
    2. Barth, Anne-Kathrin & Heimeshoff, Ulrich, 2011. "Does the growth of mobile markets cause the demise of fixed networks? Evidence from the European Union," 22nd European Regional ITS Conference, Budapest 2011: Innovative ICT Applications - Emerging Regulatory, Economic and Policy Issues 52144, International Telecommunications Society (ITS).
    3. Vogelsang, Ingo, 2010. "The relationship between mobile and fixed-line communications: A survey," Information Economics and Policy, Elsevier, vol. 22(1), pages 4-17, March.
    4. Barros, Pedro & Cadima, Nuno, 2000. "The Impact of Mobile Phone Diffusion on the Fixed-Link Network," CEPR Discussion Papers 2598, C.E.P.R. Discussion Papers.
    5. Madden, Gary & Coble-Neal, Grant, 2004. "Economic determinants of global mobile telephony growth," Information Economics and Policy, Elsevier, vol. 16(4), pages 519-534, December.
    6. Grzybowski, Lukasz, 2014. "Fixed-to-mobile substitution in the European Union," Telecommunications Policy, Elsevier, vol. 38(7), pages 601-612.
    7. Dewenter Ralf & Haucap Justus, 2008. "Demand Elasticities for Mobile Telecommunications in Austria," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 228(1), pages 49-63, February.
    8. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, April.
    9. Rodini, Mark & Ward, Michael R. & Woroch, Glenn A., 0. "Going mobile: substitutability between fixed and mobile access," Telecommunications Policy, Elsevier, vol. 27(5-6), pages 457-476, June.
    10. Wolfgang Briglauer & Anton Schwarz & Christine Zulehner, 2011. "Is fixed-mobile substitution strong enough to de-regulate fixed voice telephony? Evidence from the Austrian markets," Journal of Regulatory Economics, Springer, vol. 39(1), pages 50-67, February.
    11. Gruber,Harald, 2005. "The Economics of Mobile Telecommunications," Cambridge Books, Cambridge University Press, number 9780521843270, September.
    12. Ward, Michael R. & Woroch, Glenn A., 2010. "The effect of prices on fixed and mobile telephone penetration: Using price subsidies as natural experiments," Information Economics and Policy, Elsevier, vol. 22(1), pages 18-32, March.
    13. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-838, May.
    14. Andre Bonfrer & Ernst R. Berndt & Alvin Silk, 2006. "Anomalies in Estimates of Cross-Price Elasticities for Marketing Mix Models: Theory and Empirical Test," NBER Working Papers 12756, National Bureau of Economic Research, Inc.
    15. Garbacz, Christopher & Thompson Jr, Herbert G., 2007. "Demand for telecommunication services in developing countries," Telecommunications Policy, Elsevier, vol. 31(5), pages 276-289, June.
    16. Muttur Ranganathan Narayana, 2008. "Substituability between Mobile and Fixed Telephones: Evidence and Implications for India," CIRJE F-Series CIRJE-F-550, CIRJE, Faculty of Economics, University of Tokyo.
    17. Hamilton, Jacqueline, 0. "Are main lines and mobile phones substitutes or complements? Evidence from Africa," Telecommunications Policy, Elsevier, vol. 27(1-2), pages 109-133, February.
    18. Lukasz Grzybowski, 2005. "Regulation of Mobile Telephony across the European Union: An Empirical Analysis," Journal of Regulatory Economics, Springer, vol. 28(1), pages 47-67, July.
    19. Judson, Ruth A. & Owen, Ann L., 1999. "Estimating dynamic panel data models: a guide for macroeconomists," Economics Letters, Elsevier, vol. 65(1), pages 9-15, October.
    20. Vagliasindi, Maria & Güney, Izzet & Taubman, Chris, 2006. "Fixed and mobile competition in transition economies," Telecommunications Policy, Elsevier, vol. 30(7), pages 349-367, August.
    21. Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-326, June.
    22. Haucap, Justus, 2003. "The Economics of Mobile Telephone Regulation," Working Paper 4/2003, Helmut Schmidt University, Hamburg.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Lange, Mirjam R.J. & Saric, Amela, 2016. "Substitution between fixed, mobile, and voice over IP telephony – Evidence from the European Union," Telecommunications Policy, Elsevier, vol. 40(10), pages 1007-1019.
    2. McDonough, Carol C., 2013. "Consumer demand for fixed and mobile broadband," 24th European Regional ITS Conference, Florence 2013 88485, International Telecommunications Society (ITS).
    3. Hoernig, Steffen & Bourreau, Marc & Cambini, Carlo, 2015. "Fixed-mobile substitution and termination rates," Telecommunications Policy, Elsevier, vol. 39(1), pages 65-76.
    4. Ünver, Mehmet Bilal & Göktaylar, Yavuz & Tezel, Fatih, 2015. "Regulatory Implications of FMS for Voice Services in Turkey: Analysis of Recent Regulatory Acts on Deregulation and Margin Squeeze," 26th European Regional ITS Conference, Madrid 2015 127186, International Telecommunications Society (ITS).
    5. Grzybowski, Lukasz, 2014. "Fixed-to-mobile substitution in the European Union," Telecommunications Policy, Elsevier, vol. 38(7), pages 601-612.
    6. Charlita de Freitas, Luciano & Vilas Boas de Freitas, Igor, 2016. "Aurora of a new order in the Brazilian telecommunications sector and regulation," MPRA Paper 71550, University Library of Munich, Germany.
    7. Lange, Mirjam R. J. & Šaric, Amela, 2014. "Deregulating fixed voice services? Empirical evidence from the European Union," 20th ITS Biennial Conference, Rio de Janeiro 2014: The Net and the Internet - Emerging Markets and Policies 106864, International Telecommunications Society (ITS).
    8. Sobolewski, Maciej & Kopczewski, Tomasz, 2017. "Estimating demand for fixed-line telecommunication bundles," Telecommunications Policy, Elsevier, vol. 41(4), pages 227-241.
    9. Barth, Anne-Kathrin & Heimeshoff, Ulrich, 2012. "Der angemessene Kostenmaßstab für Terminierungsentgelte - "Pure LRIC" vs. "KeL"," DICE Ordnungspolitische Perspektiven 29, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    10. Schmitt, Stephan & Neu, Werner, 2017. "The beta in the WACC for regulated fixed and mobile telecommunica-tions services: Its role and robust estimation," 28th European Regional ITS Conference, Passau 2017 169496, International Telecommunications Society (ITS).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Barth, Anne-Kathrin & Heimeshoff, Ulrich, 2014. "What is the magnitude of fixed–mobile call substitution? Empirical evidence from 16 European countries," Telecommunications Policy, Elsevier, vol. 38(8), pages 771-782.
    2. Barth, Anne-Kathrin & Heimeshoff, Ulrich, 2011. "Does the growth of mobile markets cause the demise of fixed networks? Evidence from the European Union," 22nd European Regional ITS Conference, Budapest 2011: Innovative ICT Applications - Emerging Regulatory, Economic and Policy Issues 52144, International Telecommunications Society (ITS).
    3. Wolfgang Briglauer & Anton Schwarz & Christine Zulehner, 2011. "Is fixed-mobile substitution strong enough to de-regulate fixed voice telephony? Evidence from the Austrian markets," Journal of Regulatory Economics, Springer, vol. 39(1), pages 50-67, February.
    4. Ezzat Riham Ahmed, 2017. "Fixed-Mobile Substitution in MENA Countries: The Future of Fixed-Line Markets," Review of Network Economics, De Gruyter, vol. 16(4), pages 387-417, December.
    5. Vogelsang, Ingo, 2010. "The relationship between mobile and fixed-line communications: A survey," Information Economics and Policy, Elsevier, vol. 22(1), pages 4-17, March.
    6. Oğuz, Fuat & Akkemik, K. Ali & Göksal, Koray, 2015. "Toward a wider market definition in broadband: The case of Turkey," Utilities Policy, Elsevier, vol. 37(C), pages 111-119.
    7. Bölcskei, Vanda, 2010. "A távbeszélő-szolgáltatások keresleti modelljeinek áttekintése - különös tekintettel a vezetékes és mobilszolgáltatások közötti helyettesítés becslésére [A review of the demand models of telephone ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(6), pages 517-535.
    8. Lange, Mirjam R.J. & Saric, Amela, 2016. "Substitution between fixed, mobile, and voice over IP telephony – Evidence from the European Union," Telecommunications Policy, Elsevier, vol. 40(10), pages 1007-1019.
    9. Šaric, Amela & Lange, Mirjam R. J., 2014. "Deregulating fixed voice services? Empirical evidence from the European Union," 25th European Regional ITS Conference, Brussels 2014 101385, International Telecommunications Society (ITS).
    10. Hoernig, Steffen & Bourreau, Marc & Cambini, Carlo, 2015. "Fixed-mobile substitution and termination rates," Telecommunications Policy, Elsevier, vol. 39(1), pages 65-76.
    11. Ward, Michael R. & Zheng, Shilin, 2012. "Mobile and fixed substitution for telephone service in China," Telecommunications Policy, Elsevier, vol. 36(4), pages 301-310.
    12. Suárez, David & García-Mariñoso, Begoña, 2013. "Which are the drivers of fixed to mobile telephone access substitution? An empirical study of the Spanish residential market," Telecommunications Policy, Elsevier, vol. 37(4), pages 282-291.
    13. Srinuan, Pratompong & Srinuan, Chalita & Bohlin, Erik, 2012. "Fixed and mobile broadband substitution in Sweden," Telecommunications Policy, Elsevier, vol. 36(3), pages 237-251.
    14. Karamti, Chiraz, 2019. "Lopsided effects of telecom reforms on mobile markets in the enlarged EU: Evidence from dynamic quantile model," Telecommunications Policy, Elsevier, vol. 43(3), pages 238-261.
    15. Wellmann, Nicolas, 2019. "Are OTT messaging and mobile telecommunication an interrelated market? An empirical analysis," Telecommunications Policy, Elsevier, vol. 43(9).
    16. Jinsoo Bae & Yun Jeong Choi & Jong-Hee Hahn, 2014. "Fixed and mobile broadband; Are they substitutes or complements?," Working papers 2014rwp-68, Yonsei University, Yonsei Economics Research Institute.
    17. Pratompong Srinuan & Chalita Srinuan & Erik Bohlin, 2011. "The Mobile Broadband and Fixed Broadband Battle in Swedish Market: Complementary or substitution?," RSCAS Working Papers 2011/36, European University Institute.
    18. Quaglione, Davide & Matteucci, Nicola & Furia, Donatella & Marra, Alessandro & Pozzi, Cesare, 2020. "Are mobile and fixed broadband substitutes or complements? New empirical evidence from Italy and implications for the digital divide policies," Socio-Economic Planning Sciences, Elsevier, vol. 71(C).
    19. Latimaha, Rusli & Bahari, Zakaria, 2016. "Elasticity of Demand for Cellular Phone Network Access in Malaysia," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 50(2), pages 125-132.
    20. Lukasz Grzybowski & Frank Verboven, 2016. "Substitution between fixed-line and mobile access: the role of complementarities," Journal of Regulatory Economics, Springer, vol. 49(2), pages 113-151, April.

    More about this item

    Keywords

    Dynamic Panel Model; Fix-Mobile Substitution; Telecommunication markets;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:dicedp:49. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/diduede.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.