The paper entitled “Does one more or one less mobile operator affect prices? A comprehensive ex-post evaluation of entries and mergers in European mobile telecommunication markets” written by Gergely Csorba and Zoltán Pápai will be presented at the Competition and Regulation European Summer School and Conference (CRESSE) in July 2013.
The paper can be downloaded from here.
Presentation can be downloaded from here.
This paper estimates the impact of entries and mergers on the price of mobile voice services in a panel database of 27 European Member States between 2003 and 2010. Our difference-in-differences econometric methodology exploits the variance in different structural changes between countries to separate the respective effects. Our results show that the effect of entry crucially depends on the number of active operators and the type of entrant, and not controlling for these differences might lead to misleading conclusions. We find no robust evidence that entry has a price-decreasing effect on markets with originally 2 operators. However, the entry of a 4th operator does have a significant price-decreasing effect, but with different dynamics concerning the entrant’s type. When we separate entry effects for the subsequent years, we show that the significant price-decreasing effects for local operators entering occur only in the first year after entry, while the significant price-decreasing effects for multinational entries are present in the long-run. Last, we find no price-increasing effects of mergers, independently whether they reduced the number of operators to 4 or 3.