Access regulation and infrastructure investment in the mobile telecommunications industry

  • Authors:

  • Jihwan Kim;Yunhee Kim;Noel Gaston;Romain Lestage;Yeonbae Kim;David Flacher

  • Affiliations:

  • Technology Management, Economics and Policy Program (TEMEP), College of Engineering, Seoul National University, 599 Gwanak-ro, Gwanak-gu, Seoul 151-747, Republic of Korea;Technology Management, Economics and Policy Program (TEMEP), College of Engineering, Seoul National University, 599 Gwanak-ro, Gwanak-gu, Seoul 151-747, Republic of Korea;Globalisation and Development Centre and School of Business, Bond University, Gold Coast, Queensland 4229, Australia;Centre d'Economie de l'université Paris Nord, Paris 13 University, 99 avenue Jean-Baptiste Clément, 93430 Villetaneuse, France and France Telecom, Orange Labs, 38-40, rue du Gén ...;Technology Management, Economics and Policy Program (TEMEP), College of Engineering, Seoul National University, 599 Gwanak-ro, Gwanak-gu, Seoul 151-747, Republic of Korea;Centre d'Economie de l'université Paris Nord, Paris 13 University, 99 avenue Jean-Baptiste Clément, 93430 Villetaneuse, France

  • Venue:
  • Telecommunications Policy
  • Year:
  • 2011

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Abstract

While mobile virtual network operators (MVNOs) increase competition in the mobile telecommunications industry, granting market access to MVNOs may have unwanted consequences. In particular, infrastructure investment by incumbent mobile network operators (MNOs) may be smaller. This paper examines the effects of MVNO entry and access regulation on the investment behavior of MNOs. It uses firm-level data for 58 MNOs in 21 OECD countries during 2000-2008. The results suggest that mandated provision of access is related to lower investment intensity of MNOs, while voluntary access provision has no effect. Although reduced investment incentives do not necessarily correspond to under-investment, this underscores the need for those countries where MVNOs are provided access to address the issue of investment incentives.