Title: Market conduct, interconnection costs and benchmarking in mobile phone industry: the Tunisian case

Authors: Sami Debbichi; Ahmed Ben Khalifa

Addresses: Faculty of Economics and Management, University of Tunis El Manar, Tunis, Tunisia ' Faculty of Economics and Management, University of Tunis El Manar, Tunis, Tunisia

Abstract: 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%.

Keywords: mobile phones; cell phones; interconnection costs; market conduct; benchmarking; Tunisia; Lerner index; Abba Lerner; market power; balanced calling pattern; price elasticity; demand; interconnection rates; cost estimation; telephone operators; cross-subsidies; fixed networks; mobile networks; interconnection fees.

DOI: 10.1504/IJMLO.2013.051568

International Journal of Mobile Learning and Organisation, 2013 Vol.7 No.1, pp.1 - 13

Received: 01 Mar 2012
Accepted: 27 Sep 2012

Published online: 22 Jan 2013 *

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