The paper examines what factor facilitates most network expansion using micro data from 45 fixed-line and mobile telephone operators in 18 African countries. In theory the telecommunications sector has two sector-specific characteristics: network externalities and discriminatory pricing. It finds that many telephone operators in the region use peak and off-peak prices and termination-based price discrimination, but are less likely to rely on strategic fee schedules such as tie-in arrangements. The estimated demand function based on a discreet consumer choice model indicates that termination-based discriminatory pricing can facilitate network expansion. The paper also shows that the implied price-cost margins are significantly high.
Regulatory Governance and Sector Performance: Methodology and Evaluation for Electricity Distribution in Latin America
This paper analyses the outcomes from dynamic pricing of a utility on its profits, in the context of the utility facing competitive fringe, short-run network adjustment costs, theft of service, and the threat of a retaliatory regulatory review.