Orange’s recent Academic Publications

The reviews in which the articles listed below are published are mostly journals classified in the CNRS ranking of international reviews in economics and management. This ranking is an inescapable reference and is recognized both in France and internationally. Many magazines are not included in the ranking.

Entry and merger policy - December 2017

This note examines merger policy towards new entrants. We show that the optimal policy is driven by a simple sufficient statistic and that, under certain conditions, competition authorities should commit to being more lenient towards successful, rather than unsuccessful, entrants.

  1. Article available on ScienceDirect.com (warning: content to be paid)

Mobile-only consumers arise from heterogeneous valuation of fixed services - 29 September 2017

Mobile-only users are usually perceived as a consequence of fixed-mobile substitution. This study uses a unique dataset based on a survey in France, combined with interviewee's telecommunications billing data, to reveal heterogeneous consumer preferences for fixed services. With the same mixed logit model we estimate the willingness to pay (WTP) for fixed communications services and fixed-mobile relationship. Results show a very large heterogeneity of WTP for fixed services among consumers. In addition, we show that fixed and mobile data are complement for all consumers. Mobile-only consumers have a much lower but non-zero WTP, and higher price sensitivity compared to fixed-mobile consumers. Consequently, an increase in the fixed offer price would reduce the demand for fixed service. Heterogeneous preferences for fixed services constitute an alternative explanation for the existence of mobile-only users, despite the complementary nature of fixed and mobile broadband. Counter-factual simulations show that the share of mobile-only could also be driven by the way to subsidize mobile handset. For instance, making the handset subsidy only available to fixed-mobile quadruple play subscribers could reduce the share of mobile-only by half.

  1. Article available on ScienceDirect.com (warning: content to be paid)

Transition from copper to fiber broadband: The role of connection speed and switching costs – July 15, 2017

We estimated a mixed logit model using data on the broadband technologies chosen by 94,388 subscribers of a single European broadband operator on a monthly basis between January and December 2014. We found that consumers have similar valuation of DSL connection speeds in the range between 1 and 8  Mbps. Moreover, in January 2014, the valuation of FttH connections with a speed of 100  Mbps was not much higher than of DSL connections with a speed of 1 to 8  Mbps, but it has increased quickly over time and became significantly higher at the end of the period in December 2014. The small initial difference in the valuation of DSL and FttH connections may be because consumers’ basic Internet requirements such as browsing, emailing, reading news, shopping, and even watching videos online could be satisfied with a connection speed below 8  Mbps. We also found that consumers face significant switching costs when changing broadband tariff plans, which are substantially higher when switching from DSL to FttH technology. According to counterfactual simulations based on our model, switching costs between technologies are the main factor which slows down consumer transition from DSL to FttH.

  1. Article available on ScienceDirect.com (warning: content to be paid)

Market structure and investment in the mobile industry – December 2016

The impact of market structure, that is the number of firms and asymmetry, on investment is an important topic in the mobile industry. However, previous literature remains ambiguous about the direction of the relationship. This paper provides an empirical evidence of the impact of market structure on investment in the European mobile industry. The empirical assessment is based on a Salop model with vertical differentiation. Consistently with the prediction of this model, we find that both the number of operators and market share asymmetry have significant effects on investment. In symmetric markets, investment per operator falls with the number of operators, with larger effects for operators that lose market share more than the average. The industry investment rises with the number of operators in the short run, but eventually falls in the long run due to significant adjustment costs of investment in the mobile industry. These findings suggest that investment should be taken into account when analysing the welfare effects of market structure in the mobile industry.

  1. Article available on ScienceDirect.com (warning: content to be paid)

Roaming Like at Home: Retail Roaming at Domestic Price Does not Require New Wholesale Regulation - May 2016

According to the Regulation on open internet and roaming 2015 / 2120 in its article 19, “By 29 November 2015, the Commission shall initiate a review of the whole sale roaming market with a view to assessing measures necessary to enable abolition of retail roaming surcharges by 15 June 2017”. The Commission aims to analyse if the current situation of the wholesale roaming market enables the implementation of Roaming Like at Home (RLAH). Its objective is to consider the main regulatory options available at the wholesale level to enable RLAH including the revision of current wholesale caps. Two main issues stand out : the need for further regulation through a decrease of current wholesale caps and its own justification. The present paper analyses whether the wholesale international roaming market is currently competitive in order to know if and how wholesale roaming market should be regulated. We analyse this issue from two angles declining in the two sections of the paper : assessing the degree of competitiveness of international wholesale roaming market mechanisms and incentives and comparing the current level of wholesale roaming in bound prices to wholesale roaming inbound full costs in order to evaluate if roaming prices are competitive.

  1. Roaming like at Home: Retail roaming at domestic price does not require new Wholesale regulation

The role of market power in economic growth: an analysis of the differences between EU and US competition policy theory, practice and outcomes - June 2016

The European Union has experienced weak economic performance over the past 15 years, compared to the United States. In order to restore investment, innovation,and therefore growth, the European Commission seeks to raise the level of static competition in all markets. The Commission’s economic policy is largely determined by its competition policy. This policy is derived from its doctrine on competition law, which regards the exercise of market power as a source of inefficiency and advocates that its effects should be banned. By contrast, the United States competition authorities, under the influence of the Chicago School, consider that market power is a necessary incentive to invest and a fair return on investment. Recent findings in economic growth theory, which state that increased competition intensity may harm endogenous innovation, provide a theoretical basis to support the United States approach and call for a review of European doctrine.