The Welfare Effects of Mobile Termination Rate Regulation in AsymmetricOligopolies: the Case of Spain

Abstract

We examine the e¤ects of mobile termination rate regulation in asymmetric oligopolies. We do this by extending existing models of asymmetric duopoly and symmetric oligopoly where consumer expectations about market shares are passive. We rst calibrate product di¤erentiation parameters using detailed data from the Spanish market from 2010. Next, we predict equilibrium outcomes and welfare e¤ects under alternative scenarios of future termination rates. Lowering termination rates typically lowers pro ts of all networks and improves consumer and total surplus.