Simulation in the mobile rielephony market: Price discrimination strategy under asymmetrical conditions

In the following paper we propose a competitive model in the mobile telephony market that can be integrated in various simulation environments. The main factors that have been characterizing the mobile telephony industry during the last years are an exponential growth of traffic demand and the evolution from a market monopoly to full competition with the consequent growth of competitive pressure. We aim to formalize the complex competitive environment of network interconnection under a price discrimination hypothesis. The policy of price discrimination in the niobile 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. An other important hypothesis is the asymmetry of networks market shares; such asymmetry is due to the incumbent network brand loyalty. Through a simulation program, from our hypotheses we have realised a mobile telephone model development, validation and testing.