The impact of mobile virtual network operators on the mobile telecommunications services market: The case of the Czech Republic

Abstract

Mobile virtual network operators (MVNOs) offer mobile telecommunications services by purchasing capacity from mobile network operators (MNOs) and competing on the retail market. This study examines national data to identify possible impacts of MVNOs on the mobile market and on mobile service users. While open wholesale markets for MVNOs are relatively widespread in European countries, evidence of their impact on end users is limited due to a lack of previous research. This study uses data from the market entry of MVNOs in the Czech Republic in 2013 to estimate the impact on end users. Based on synthetic control methods, the results clearly show that the market entry of MVNOs led to a decrease in the price of calls and to a decrease in the average monthly revenue per user (ARPU) of operators. However, no significant effect on the price of data or on consumption was found. These results have some implications for policy and for the mobile industry.