We re-consider the impact that regulation of call termination on mobile phones has had on mobile customers' bills. Using a large panel covering 27 countries, we find that the 'waterbed' phenomenon, initially observed until early 2006, becomes insignificant on average over the 10-year period, 2002-11. We argue that this is related to the changing nature of the industry, whereby mobile-to-mobile traffic now plays a much bigger role compared to fixed-to-mobile calls in earlier periods. Over the same decade, we find no evidence that regulation caused a reduction in mobile operators' profits and investments. ? 2015 The Authors.

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1 August 2015

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The Economic Journal 125(586) , pp.F31-F48, 2015

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DOI: 10.1111/ecoj.12194

https://onlinelibrary.wiley.com/doi/full/10.1111/ecoj.12194

This Journal article is published under the centre's Growth programme.