The Impact of Competition in the Italian Mobile Telecommunications Market.

Over the last decade the growth of mobile telecommunications market has been very rapid. The technological changes have caused a drastic cost reduction and a rising differentiation in the supply of services. The Italian mobile telecommunications market is forecast to grow from about 22 million users in 1999 to an estimated 42 million in the year 2003. Currently four network operators, Telecom Italia Mobile (TIM), Omnitel Pronto Italia (OPI), Wind and BLU, share the market. The model introduced in this paper can be used to estimate the effects of a new entrant carrier in terms of profits, final prices and market share among the competitors. The proposed model through the construction of a pattern representing the considered production system allows the evaluation of the impact of carriers tariff policies in terms of final consumer prices. Such model may be useful to highlight regulatory considerations and understand relevant features related to the structure of the mobile telephony industry. [ABSTRACT FROM AUTHOR]