Calling party pays or receiving party pays? The diffusion of mobile telephony with endogenous regulation

Ralf Dewenter and Jörn Kruse

No 10, DICE Discussion Papers from Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE)

Abstract: This paper analyzes the impact on mobile telephony diffusion patterns of the two predominant payment regimes, calling party pays (CPP) and receiving party pays (RPP), for mobile termination services. By applying instrumental variable techniques to panel data we account for a possible interdependency of penetration rates and regulatory interventions. For this purpose we use data on political and institutional factors to instrument endogenous regulatory decisions. We conclude from our empirical analysis that there is no significant impact of either RPP or CPP on penetration rates. Therefore an application of RPP in order to obviate regulation of termination fees would be feasible.

Keywords: mobile telephony markets; calling-party-pays; mobile termination fees; endogenous regulation (search for similar items in EconPapers)
JEL-codes: L1 L5 L96 (search for similar items in EconPapers)
Date: 2010
New Economics Papers: this item is included in nep-ind and nep-reg
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Citations: View citations in EconPapers (7)

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Journal Article: Calling party pays or receiving party pays? The diffusion of mobile telephony with endogenous regulation (2011)
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