DP6224 Wholesale Markets in Telecommunications

Author(s): Marc Bourreau, Johan Hombert, Jérôme Pouyet, Nicolas Schutz
Publication Date: March 2007
Keyword(s): telecommunications, upstream and downstream markets, vertical integration
JEL(s): L13, L51
Programme Areas: Industrial Organization
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=6224

In telecommunications some operators have deployed their own networks whereas some others have not. The latter firms must purchase wholesale products from the former to be able to compete on the final market. We show that, even when network operators compete in prices and offer perfectly homogenous products on the wholesale market, that market may not be competitive. Based on our theoretical analysis, we derive some policy implications for the broadband and the mobile telephony markets.