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Is fixed-mobile substitution strong enough to de-regulate fixed voice telephony? Evidence from the Austrian markets

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Abstract

In this paper, we estimate own-price elasticities for fixed network voice telephony access and national calls services for private users as well as cross-price elasticities to mobile services using time series data from 2002 to 2007 from the Austrian markets. Using instrumental variable estimates and considering cointegration, we find that access is inelastic while calls are elastic. We conclude that the retail market for national calls of private users can probably be deregulated due to sufficient competitive pressure from mobile. Access-substitution on the other hand does not seem to be strong enough to justify de-regulation.

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Authors and Affiliations

  1. Vienna University for Economics and Business, Augasse 2-6, 1090, Vienna, Austria

    Wolfgang Briglauer

  2. Economics Division, Austrian Regulatory Authority for Broadcasting and Telecommunications (RTR), Mariahilfer Straße 77-79, 1060, Vienna, Austria

    Anton Schwarz

  3. Johannes Kepler University Linz, Altenberger Straße 69, 4040, Linz, Austria

    Christine Zulehner

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  1. Wolfgang Briglauer
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  2. Anton Schwarz
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  3. Christine Zulehner
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Correspondence to Anton Schwarz.

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The views expressed are entirely those of the authors and do not necessarily represent those of RTR, Telekom-Control-Kommission (TKK) or WIFO. The usual caveat applies.

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Briglauer, W., Schwarz, A. & Zulehner, C. Is fixed-mobile substitution strong enough to de-regulate fixed voice telephony? Evidence from the Austrian markets. J Regul Econ 39, 50–67 (2011). https://doi.org/10.1007/s11149-010-9132-1

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  • DOI: https://doi.org/10.1007/s11149-010-9132-1

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