6533b82efe1ef96bd1292a00

RESEARCH PRODUCT

Mobile telephony in emerging markets: The importance of dual-SIM phones

Kjetil AnderssonDaniel Göller

subject

Economics and EconometricsL13Telephone networkbusiness.industryL9605 social sciencesPrice discriminationmulti-simCompetition (economics)price discriminationSoftware deployment0502 economics and businessddc:330Network competitiondual-SIM phonesBusinessMobile telephony050207 economicsEmerging marketsSet (psychology)Dual SIMIndustrial organizationD43050205 econometrics

description

Abstract A substantial share of customers in emerging markets use dual-SIM phones and subscribe to two mobile networks. A primary motive for so called multi-simming is to take advantage of cheap on-net services from both networks. In our modelling effort, we augment the seminal model of competing telephone networks á la Laffont, Rey and Tirole (1998b) by a segment of flexible price hunters that may choose to multi-sim. According to our findings, in equilibrium, the networks set a high off-net price in the linear tariffs to achieve segmentation. This induces the price hunters to multi-sim. We show that increased deployment of dual-SIM phones may induce a mixing equilibrium with high expected on-net prices. Thus, somewhat paradoxically, deployment of a technology that increases substitutability, and thereby competition, may end up raising prices.

yearjournalcountryeditionlanguage
2020-09-01
https://hdl.handle.net/10419/181567