The Demand for Mobile Services in Colombia and the Impact of Asymmetric Mobile Regulation
21 May 2013
By Dr. Agustin Ros and Douglas Umaña
In 2009, the Colombian telecommunications regulator -- Comisión de Regulación de Comunicaciones (CRC) -- declared Colombian mobile operator Comcel a dominant operator. As a result, the CRC imposed asymmetric regulation on Comcel by establishing a retail price cap for its off-net voice calls. In practice, this forced Comcel to rebalance its retail rates by lowering its off-net prices and/or increasing its on-net prices. In this article, first published in Info, NERA Vice President Dr. Agustin Ros and Senior Analyst Douglas Umaña examine the economic and consumer impact of the CRC's 2009 dominance regulation. The authors estimate a demand model of the Colombian mobile market during the period 2005–2011 using publicly available data. The article begins with a description of the Colombian mobile market since the late 1990s, followed by a discussion on the hypothesized effects of asymmetric regulation on mobile markets. The authors conclude with an empirical analysis of demand for mobile services in Colombia and find that the asymmetric regulation cost consumers approximately $100 million USD.
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