This thesis analyses the pricing policies used by operators when they establish broadband tariffs. The studies draw on datasets that combine broadband plans’ characteristics and tariffs with other sources of data at country level to reflect the market structure and regulation activity. The pricing models in this dissertation share the common thread of using three groups of variables to explain the level of broadband prices: 1- the characteristics of the broadband service, 2- the operators’ commercial strategies, and 3- the market structure and regulatory policies implemented. The pricing models are estimated using the following econometric techniques: pooled ordinary least squares (OLS) with country and time fixed effects, and two stage least squares (2SLS, instrumental variable techniques).
The level of broadband prices concerns both national governments and international organisations, and this dissertation contributes to provide some guidance to regulators and competition authorities, helping them in the implementation of policies so as to foster competition in the market and ultimately stimulate the diffusion of broadband services.
The first thesis chapter analyses the determinants of broadband Internet access prices in a group of 15 EU countries between 2008 and 2011. Using a rich panel data set of broadband plans, it is shown how downstream speed (Mbps) increases prices, and that the price per Mbps of cable modem and fibre technologies is lower than that of xDSL. Operators’ marketing strategies are also analysed as it is shown how much prices rise when the broadband service is offered in a bundle with voice telephony and/or television, and how much they fall when download volume caps are included. The most insightful results of this study are provided by a group of metrics that represent the situation of competition and entry patterns in the broadband market. It is found that consumer segmentation positively affects prices. Moreover, broadband prices are higher in countries where entrants make greater use of bitstream access and lower in countries where there is an intensive use of direct access (local loop unbundling). However, there is not a significant impact of inter-platform competition on prices.
The second chapter analyses the strategies adopted by mobile operators when they set the prices of broadband plans. It is explained that operators design multi-tier price schemes in order to segment consumers according to their preferences. Operators usually offer only a few unlimited usage contracts and three-part tariffs for data limited plans. In the later case, the tariff includes an access fee, a usage allowance (the number of GB that consumers can use for free), and a penalty system for the case in which consumers exceed the contracted allowance. The empirical model shows that the prices of usage based contracts are lower than those of unlimited contracts, and that the monthly price depends on the type of penalty included in the plan. The prices also depend on other characteristics of the service such as the provided technology, the download speed and the telephone call allowances. It is also explained that most plans bundle mobile broadband plans with smartphones. This type of plans last longer and might be more expensive than the plans that only include the SIM card. Specifically, it is shown that the monthly price of the broadband service is more expensive when the plan includes an iPhone or a Samsung. Moreover, it is found that the monthly prices are higher when the plan includes a discount for the acquisition of the smarthphone. Finally, this chapter also studies the effects of market structure and entry regulation on prices and shows that mobile virtual operators have helped to reduce prices.
The third chapter studies the mobile broadband market in Spain. The mobile broadband service has experienced a strong expansion in Spain, reaching a penetration of over 70% of the population at the beginning of 2014. This growth can be explained by the benefits that offer the third and the fourth generation of mobile technology, and by the continuous price reductions. In spite of this, prices in Spain are still higher than the European average. This chapter explains the process of technological innovation that has allowed the emergence of mobile broadband, and its launch in Spain. New commercial strategies used by mobile operators, such as bundling and plans that include fixed and mobile services are examined. The analysis shows that the presence of mobile virtual network operators and bundling have been effective in fostering competition and reducing prices. It is also discussed how technological convergence between fixed and mobile services has promoted restructuring and market concentration.
| Identifer | oai:union.ndltd.org:TDX_UB/oai:www.tdx.cat:10803/320177 |
| Date | 07 July 2015 |
| Creators | Martínez Santos, Fernando |
| Contributors | Calzada, Joan, Borrell, Joan-Ramon, Universitat de Barcelona. Departament de Política Econòmica i Estructura Econòmica Mundial |
| Publisher | Universitat de Barcelona |
| Source Sets | Universitat de Barcelona |
| Language | English |
| Detected Language | English |
| Type | info:eu-repo/semantics/doctoralThesis, info:eu-repo/semantics/publishedVersion |
| Format | 187 p., application/pdf |
| Source | TDX (Tesis Doctorals en Xarxa) |
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