Could Asymmetric Regulation of Access Charges Improve the Competition between Mobile Networks?

Abstract

This paper analyses the competition between interconnected mobile phone networks, under the assumptions of discriminatory retail pricing and non reciprocal access charges. In the two way interconnection, the networks revenue depends on two factors: the retail price and the access charge. If the retail prices are different between calls that terminate on the same network (on net) and calls that terminate on the rival network (off net), the competition is more complex, involving positive networks externalities for the incumbent operator.