Interchange flows between mobile telephone networks: Asymmetry and discrimination

Over the last decade, the development of mobile telecommunications has reached a very high rate of growth in most industrialised countries and, in particular, in Italy. The increasing volume of mobile phone calls and the relative growing number of carriers are transforming mobile telecommunications from that of a traditional monopoly and instead into a market with growing competitive pressures. The older scenario of telecommunication mobile services formed by a state monopoly carrier is changing into one in which there are different competitive companies that offer mobile telecommunication services. In this paper we will. analyse, through our simulation modelling, the relationship between market share and profit resulting from a strategy of price discrimination. In particular, the policy of price discrimination in the mobile telephone market is based on the possibility for the carriers to set different retail prices with regard to calls made on net or off net.