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The potential for large mobile networks to use differential call charges as a means of foreclosure

In many, but not all, countries mobile-to-mobile (M2M) access charges are set in excess of cost; and mobile phone customers have to pay higher charges to call subscribers to different mobile networks (“off-net” calls) than to call other subscribers to their own network (“on-net” calls).

Such behaviour raises questions as to the incentives on mobile network operators (MNOs) to set efficient M2M access charges, the relative position of large and small networks, and the impact of their behaviour on consumer welfare.Frontier’s modelling work challenges the received regulatory wisdom that large operators may use high charges to foreclose their competitors.

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