Competition in telecommunications
Competition in telecommunications
Telecommunications Policy
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In this work, we estimate the market power and interconnection costs with the Lerner index on the interconnection market. Our work will focus on the hypothesis 'Balanced Calling Pattern', to estimate the price elasticity of demand. Results show that operators practice full market power. Since the year 2009, interconnection rates are oriented to costs. But paradoxically, costs increased rather than decreased. Benchmarking results differ from our cost estimation and prove that mobile operators practices cross-subsidies between fixed and mobile networks. Our results suggest that operators should reduce their interconnection fees by 70% in 2004 and by 8% in 2010. Compared to the regulator's results in a recent study on prices, this reduction should be 30%.