Do International Roaming Alliances Harm Consumers?

31 Pages Posted: 31 Dec 2015

See all articles by Benno Buehler

Benno Buehler

Toulouse School of Economics (IDEI) ; Department of Economics - Ludwig Maximilian University Munich

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Date Written: December 2015

Abstract

This paper develops a model of international roaming in which mobile network operators (MNO's) compete both on the wholesale market to sell roaming services to foreign operators and on the retail market for subscribers. To allow their subscribers to place or receive calls abroad, they have to buy roaming services provided by foreign MNO's. In the absence of international alliances, competition between foreign operators would drive wholesale unit prices down to marginal costs. However, international alliances are endogenously formed since they serve as a commitment device to soften competition on the retail market, leading to excessively high roaming perÔÇÉcall prices.

Suggested Citation

Buehler, Benno, Do International Roaming Alliances Harm Consumers? (December 2015). The Journal of Industrial Economics, Vol. 63, Issue 4, pp. 642-672, 2015, Available at SSRN: https://ssrn.com/abstract=2709505 or http://dx.doi.org/10.1111/joie.12087

Benno Buehler (Contact Author)

Toulouse School of Economics (IDEI) ( email )

Place Anatole-France
Toulouse Cedex, F-31042
France

Department of Economics - Ludwig Maximilian University Munich ( email )

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Munich, DE Bavaria 80539
Germany

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