The Competition Game

Abstract

Mobile operators had monopoly rights to the termination of a call on their network. This monopoly was most pronounced in fixed to mobile calls. Reciprocity in this market was absent due to the regulation of tariffs on fixed (landline) networks. Fixed-to-mobile termination charges were a tenfold of fixed–to-fixed charges in the EU (European Commission, 2001, 16). Fixed line prices were regulated due to their dominance in the landline markets. Mobile operators were granted access to their networks at regulated prices. Prices of mobile network access, however, were not regulated. The British regulator Oftel, however, argued that all mobile operators had a monopoly position on their termination market and that termination charges, therefore, needed to be regulated (Oftel, 2001). International connection was not regulated on EU markets until 2008. This entailed sky high tariffs on international which were terminated by foreign companies. This prompted the European Commission to regulate these roaming tariffs. airports attenuated the scarcity of slots (time segments for take-off and landing). A new airline business model thus emerged that differed from the hub and spoke network. This model had direct flights between cities; high frequencies and flew to secondary airports. The new model had an optimal utilization of aircraft and crew due to short turn over times. This model was applied by Southwest Airlines in the US and by several budget airlines like Ryan Air and Easy Jet in Europe.