Journal of Economics

, Volume 96, Issue 3, pp 241–261

Mobile phone termination charges with asymmetric regulation


DOI: 10.1007/s00712-008-0054-7

Cite this article as:
Baake, P. & Mitusch, K. J Econ (2009) 96: 241. doi:10.1007/s00712-008-0054-7


We model competition between two unregulated mobile phone companies with price-elastic demand and less than full market coverage. We also assume that there is a regulated full-coverage fixed network. In order to induce stronger competition, mobile companies could have an incentive to raise their reciprocal mobile-to-mobile access charges above the marginal costs of termination. Stronger competition leads to an increase of the mobiles’ market shares, with the advantage that (genuine) network effects are strengthened. Therefore, ‘collusion’ may well be in line with social welfare.


Telecommunication Mobile phones Mobile-to-mobile access charges Network effects 

JEL Classification

L41 L96 

Copyright information

© Springer-Verlag 2008

Authors and Affiliations

  1. 1.DIW BerlinBerlinGermany
  2. 2.TU BerlinBerlinGermany

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