Determination of the optimal access charge for the mobile virtual network operator system

Abstract

The introduction of a mobile virtual network operator (MVNO) system is expected to increase consumer benefits, boost competition in the mobile market, utilize idle bandwidth, and expedite mobile-fixed line convergence and growth in the mobile Internet market. This research endeavors to study the optimal access charge for an MVNO system, which is expected to be introduced to the Korean mobile communications market. We found that the optimal access charge is higher in the interdependent model than in the independent model if demand for mobile phone service is based on a substitution relationship. We also found that the optimal access charge is higher than the marginal cost.