Competition and connection fees in the mobile phone industry
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'Mobile Termination Rates' (MTRs), more usually known as 'connection fees', are charges incurred by mobile phone operators when one of their customers calls outside their network. In each country the communications regulator is responsible for setting a 'fair' MTR which takes into account the need for investing in new infrastructures while preventing 'tacit collusion' between operators. This study begins with a theoretical description of the MTR setting framework and then compares the approaches adopted by the ARCEP in France and the Ofcom in the UK. Finally, the study compares the competitive...
'Mobile Termination Rates' (MTRs), more usually known as 'connection fees', are charges incurred by mobile phone operators when one of their customers calls outside their network. In each country the communications regulator is responsible for setting a 'fair' MTR which takes into account the need for investing in new infrastructures while preventing 'tacit collusion' between operators. This study begins with a theoretical description of the MTR setting framework and then compares the approaches adopted by the ARCEP in France and the Ofcom in the UK. Finally, the study compares the competitive landscapes surrounding the mobile phone operator industry in those two countries and assesses to which extent those differences can be attributed to the previously outlined regulatory approaches.
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