Discussion Papers

Ulrich Stumpf

Regulatory Approach to Fixed-Mobile Substitution, Bundling and Integration

Nr. 290 / März 2007


The paper addresses fixed-mobile substitution, bundling and integration – developments which seem to question the prevailing paradigm of distinct regulatory architectures for fixed and mobile services. The paper analyses their driving forces from a consumer perspective, assesses whether they change market boundaries and analyses the implications for ex ante regulation of fixed and mobile services.

Taking a short to medium-term time perspective, the paper argues that a paradigm shift is not warranted for the majority of Member States concerned. First, fixed-mobile substitution at the broadband access level is still nascent. Fixed-mobile substitution at the narrowband access level, while clearly affecting certain customer groups, does not justify the creation of a converged market. The case may be less clear for calls, but the question whether calls markets should be converged is of lesser relevance. In most countries, competition as a result of carrier selection and carrier preselection as well as voice-over-broadband allows to abandon ex ante regulation of retail fixed calls markets even where fixed-mobile call substitution is weak. Second, fixed-mobile integration, while potentially giving rise to new relevant markets, is not sufficiently advanced to justify regulatory action. Third, any competition problems related to fixed-mobile bundling should be analysed within the framework of existing market definitions.

Diskussion Paper is available for download.

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