Research Seminar MicroeconomicsMobile telephony in emerging markets: The importance of dual-SIM phonesDaniel Göller (U Agder)

6 December 2018

The Microeconomics Research Seminar welcomes Daniel Göller (U Agder), who will present his work on

"Mobile telephony in emerging markets: the importance of dual-SIM phones".

Place: Room 250, Allende-Platz 1
Hour: 17:15 - 18:45
We are looking forward to seeing you there!

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 a 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.