The welfare effects of mobile termination rate regulation in asymmetric oligopolies: The case of Spain

This paper examines the effects of mobileterminationrateregulation in asymmetric oligopolies. It extends existing models of asymmetric duopoly and symmetric oligopoly where consumer expectations about market shares are passive. First, demand and product differentiation parameters are calibrated using detailed data from the Spanish market from 2010. Next, equilibrium outcomes and welfareeffects under alternative scenarios of future terminationrates are predicted. Lowering terminationrates typically lowers profits of all networks and improves consumer and total surplus.Financial support from the Net Institute, http://www.Netinst.org is gratefully acknowledged. Hurkens gratefully acknowledges the financial support from the Spanish Ministry of Science and Innovation unde rECO2009-12695. López gratefully acknowledges the financial support from Juan de la Cierva Program.Peer Reviewe