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Evaluation of the welfare impact of regulating mobile termination rates in Portugal
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Resumo(s)
Following the European Commission’s 2009 Recommendation on the Regulatory Treatment of Fixed and Mobile Termination Rates in the EU, the Portuguese regulatory authority (ANACOM) decided to reduce termination prices in mobile networks to their long-run incremental cost (LRIC). Nevertheless, no serious quantitative assessment of the potential effects of this decision was carried out. In this paper, we adapt and
calibrate the Harbord and Hoernig (2014) model of the UK mobile telephony market to
the Portuguese reality, and simulate the likely impact on consumer surplus, profits and welfare of four different regulatory approaches: pure LRIC, reciprocal termination
charges with fixed networks, “bill & keep”, and asymmetric termination rates. Our results show that reducing MTRs does increase social welfare, profits and consumer
surplus in the fixed market, but mobile subscribers are seriously harmed by this decision.
Descrição
Palavras-chave
Telecommunications Mobile termination rates Regulation Welfare