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Conference Paper
An Analysis of the Influences of Flat Pricing for Unlimited Voice Callings: The Aspects of MNOs and Consumers in Korea
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- Authors
- Seong-Jun Lee, Saesol Choi
- Issue Date
- 2014-10
- Citation
- Asia Pacific Industrial Engineering and Management Systems Conference (APIEMS) 2014, pp.1-6
- Language
- English
- Type
- Conference Paper
- Abstract
- As the intensity of competition got higher, MNOs(mobile network operators) have launched the flat rates for unlimited voice services in Korean mobile telecommunication market. These retail prices may have induced the increase of call volume in Korean market which is experiencing the attenuation of voice usage compared to data usage. This study aims to analyze two aspects of MNOs' wholesale profit and consumers' burden of charge due to the introduction of the flat retail price for unlimited voice services. One is the change of MNOs' wholesale profit in the mobile interconnection market and the other is the comparison of the consumers' burden of charge for unlimited voice services of their own networks with respect to the increasing call volume according to their services. In order to analyze these influences, we develop two simple models respectively for MNOs' wholesale profit and for the discounted actual price of the unlimited services per a call based on increasing calling to outbound. The first model shows that wholesale profit from increasing voice traffic depends on the market share of MNOs, mobile termination rates and especially the ratio of onnet/off-net calling. The second model illustrates that the gap among consumers' welfare with unlimited voice services would be influenced by MNOs' market share and by the proportion of subscribers with off-net unlimited services. Then, empirically, in case of Korean mobile telecommunication market, we forecast the change of wholesale profit after unlimited services with the latest real data and we conjecture that the smaller MNOs set their prices reasonably based on their market share and the ratio of on/off-net calls. This approach makes us expect the implications of policies about the MTR and retail rates by the impacts after introduction of unlimited voice services from the viewpoints of MNOs and consumers in Korean mobile market.
- KSP Keywords
- Flat pricing, Mobile Network Operator(MNO), Mobile telecommunication, Real data, Voice Traffic, data usage, market share, retail price, retail rates