Browsing by Author "Grzybowski, Lukasz"

Now showing 1 - 8 of 8
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    Open Access
    An analysis of spectrum allocation for the mobile phone services
    (2021) Bahar, Tadjadine Hisseine; Grzybowski, Lukasz
    This paper investigates the relationship between the spectrum allocation policy and the mobile broadband cost in 135 countries between 2012 and 2019, with a particular focus on developing countries. We construct a panel data collected from various sources such as World Development Indicator (WDI), International Telecommunication Union (ITU) - ICT Price Baskets (IPB), Global Mobile Frequencies Database of Spectrum Monitoring Technology Advisors databases and other additional sources to conduct our empirical analysis. We estimate a system of equations - demand and supply for mobile broadband services with the following findings. First, demand for mobile Internet is negatively impacted by the price of 1GB of mobile broadband, as suggested by economic theory. Second, GDP per capita has a positive impact on the mobile broadband penetration. In the pricing equation, 79% of overall variation in mobile broadband price is explained by the list of exogenous variables included in our model specification. We find that the mobile broadband price is decreasing with population density which is an indication of economies of scale. Moreover, the price of mobile broadband increases with Herfindahl-Hirschman Index. Also, prices decrease when the market structure changes from monopoly to competition. The price of mobile broadband decreases for a greater volume of radio spectrum available to all the operators within country. Moreover, auction mechanism of spectrum allocation reduces the mobile broadband price. Our results imply that the regulatory authority and policy makers need to promote access of radio spectrum for mobile services. Moreover, a spectrum assignment mechanism based on auctions contributes to the economic efficiency by reducing marginal cost and prices of mobile broadband services.
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    Open Access
    Efficiency comparison of online and offline markets: evidence from the two largest U.S. retailers
    (University of Cape Town, 2020) Paskert, Niklas; Grzybowski, Lukasz
    The online market has developed into an equally strong competitor to the offline market. This study examines the market efficiency of the U.S. online and offline market based on the price level, price dispersion, price elasticity and menu cost. A direct comparison of all four market efficiency criteria based on empirical results is not discussed in the literature. Here, the empirical study analyzes and compares the online and offline prices of electronic products between the two largest retailers, Amazon and Walmart. The results clearly indicate that the online market is more efficient than the offline market. Comparing the online prices between the multichannel retailer Walmart and the pure online retailer Amazon we find that for 64.5% of the electronic products, Amazon has the better offer. While 26% of the prices are identical and only 9.5% of the overall prices offered by Walmart are lower. The price advantage of Amazon is explained by the strong price linkage between the online shop and the less efficient offline shop within the retailer Walmart. In 73% of the examined prices, the online and offline prices at Walmart are identical. Furthermore, this price linkage causes a high price dispersion of 14.7% between the online shops of the two retailers. As soon as Walmart breaks the price linkage through sales offers in their online shop, the price dispersion between the two retailers drops to 10.2%.
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    Essays on telecommunications demand and regulatory policies
    (2017) Mothobi, Onkokame; Grzybowski, Lukasz; Black, Anthony
    This thesis employs models of homogenous and differentiated products to empirically investigate the demand for mobile phone services in Sub-Saharan African countries. The thesis consists of a short introductory chapter, three self-contained empirical chapters, and a summary chapter. In Chapter 2, we use survey data conducted in 2011 in eleven countries in Sub-Saharan African to analyze how the availability of physical infrastructure influences the adoption of mobile phones and usage of mobile services. The availability of physical service infrastructure is approximated by data on night-time light intensity in the areas in which survey respondents reside. After controlling for a number of individual and household characteristics including disposable income, we find that adoption of mobile phones is higher in areas with better physical infrastructure. However, in the group of mobile phone adopters, the use of mobile phones for mobile financial transactions is negatively influenced by the level of infrastructure. Mobile phone users who live in areas with poor infrastructure are more likely to rely on mobile phones to make financial transactions than individuals living in areas with better infrastructure. On the other hand, the use of mobile phones to access services such as email, skype, social media networks and Internet browsing is not dependent on the availability of physical infrastructure. Our results support the notion that mobile phones improve the livelihoods of individuals residing in remote areas by providing them with access to financial services which are otherwise not available physically. Chapter 3 examines the effect of mobile number portability (MNP) on own- and cross-price elasticities. Using quarterly data for 28 mobile operators in seven Sub-Saharan Africa countries between 2010Q4 to 2014Q4 to estimate a differentiated products demand model, we find that MNP increased own-price elasticities of demand in countries that have implemented the facility. This increase in price elasticities may be a result of a reduction in switching costs between operators. On average, the introduction of MNP increases own-price elasticities by 0.47 in absolute value. We compare the level of price elasticities before and after the implementation of MNP in Ghana and Kenya, which implemented this policy in the time period of our study. Our results suggest that in Ghana, MNP increased own-price elasticities by an average of 0.35 in absolute terms from an average value across firms and over time of -0.74. In Kenya, the introduction of MNP increased own-price elasticities by an average of 0.21 in absolute terms from a lower average value across firms and over time of -0.39. However, we find that in Kenya and Ghana the average own-price elasticities remained small even after the implementation of MNP relative to other countries without MNP in place. Thus, our results suggest that MNP is not the ultimate solution for increasing competitiveness within the mobile industry. While in Chapter 3 we use a product differentiated model of demand, in Chapter 4 we make assumptions that allow us to use a homogenous model of demand to examine the effect of regulatory policies on mobile retail prices. Using aggregated quarterly data for eight African countries for the period 2010:Q4 to 2014:Q4, we estimate structural demand and supply equations. We find that mobile termination rates (MTR) have a significant positive impact on mobile retail prices. A decline in average MTR of 10% decreases average mobile retail prices by 2.5%. On the other hand, MNP has an insignificant effect on price and subscriptions in selected African countries. This may be due to inadequate implementation of MNP, which subsequently lead to low demand for porting numbers. The average market conduct in the mobile telecommunications industry for selected African countries can be approximated by Cournot Nash equilibrium. In Chapter 4 we find price elasticities that are closer to 1 in absolute terms. The price elasticity, however, is estimated at an average of -0.27 for Sub-Saharan Africa countries in Chapter 4. We attribute this inconsistency to the different assumptions made in each chapter.
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    Evaluating the impact of market structure in mobile telecommunications markets: panel data analysis for emerging economies
    (2016) Mutinda, Stanley; Grzybowski, Lukasz
    The mobile telecommunications industry continues to be at the epicentre for growth, innovation, and disruption for virtually all other industries. It is one of the keys to sustainable economic development especially in developing and emerging economies. Over the past two decades, the industry has been very dynamic, experiencing high growth rates. This paper uses econometric models to investigate the impact of market structure on market outcomes such as mobile prices and investment in emerging economies. This is done using quarterly panel data on fifteen emerging economies across four continents for the period between 2006 and 2015. The Herfindahl-Hirschman index (HHI) and the number of operators are used to proxy market structure and effective price per minute paid by consumers and capital expenditure per subscriber are used to proxy mobile prices and investment respectively. Empirical results indicate that increase in market concentration increases market prices. Results also indicate an inverted-U relationship between market concentration and investment. These results indicate that there is a trade-off between static and dynamic efficiency which means that competition in mobile telecommunications reduces both market prices and investments.
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    Is there a role for public interest provisions in South African competition law?
    (2012) Havemann, Scott; Grzybowski, Lukasz
    The recent Wal-Mart/Massmart merger decision by the Competition Tribunal has highlighted the delicate role that the South African Competition Authorities (the Competition Commission, Competition Tribunal and the Competition Appeal Court) play between balancing public interest provisions and competition issues in merger decisions. A competition policy has been identified as a key instrument in economic development. This begets the question: does the Competition Act (Act 89 of 1998 as amended) empower the Competition Authorities with adequate tools to address economic policy challenges of South Africa? And if it does not, should the Competition Act be amended to provide for such tools and what should these amendments be if any?
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    Labour market participation and access to internet during Covid-19 lockdown: Case of South Africa
    (2024) Mariti, Relebohile; Grzybowski, Lukasz
    The labour markets have become digitalised with the rise of the internet. As economies undergo industrial revolutions, various aspects of the labour market have been greatly impacted by internet use and access to information and communication technologies worldwide. Among others, the internet has affected labour market transparency, job search and matching. In addition, the recent pandemic (COVID-19) has also highlighted the crucial role that information and communication technologies as well as internet access play in the labour market. In this study, we investigate how internet access at home influences labour market attachment at the extensive margin in South Africa. Using the data from the 2020 and 2021 General Household Surveys administered by Statistics South Africa, and three identifications strategies (instrumental variable strategy, panel data methods and propensity score matching), the study finds a desirable effect of household internet connection on both the probability of being employed and the likelihood of being economically active. Moreover, the estimation results from the supplemental analysis indicate that household internet connection has a positive influence on likelihood of being employed for males and there is no sufficient evidence to suggest a corresponding effect on labour market attachment of females. Unless otherwise stated, the strict definition of unemployment is used to measure labour force participation in this study. The main findings of this study suggest that internet diffusion in recent years enabled productive South Africans to participate in the labour market. Hence policies aimed at redressing digital inequality by promoting awareness of benefits of using the internet and how to use the internet as well as subsidising data to enhance the adoption and use of internet at home are necessary to stimulate labour supply.
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    The Determinants of Microinsurance Demand in South Africa
    (2024) Morekwa, Edger; Grzybowski, Lukasz
    Low-income households face significant risk that influence their financial decisions and perpetuate poverty. This population group is adversely affected by illnesses, natural disasters, unemployment, and accidents than other groups because, among other things, they lack proper insurance. Microinsurance was introduced as a revolutionary tool with the potential to prevent poverty traps and offer reliable and affordable risk mitigation options to the poor. By providing replacement revenues in the event of insured losses and boosting positive outcomes, microinsurance can significantly reduce the welfare costs related to uninsured risks. Over the years, the take up rate of microinsurance have been low and declining. The study seeks to shed light on the determinants of microinsurance demand in South Africa.
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    The impact of heterogenous consumer preferences on welfare outcomes of government interventions
    (2019) Hawthorne, Ryan; Grzybowski, Lukasz; Edwards, Lawrence; Roberts, Simon
    Heterogeneity in the demand for telecommunications services in South Africa is investigated here in three contributions. The results of this research show that government interventions in the telecommunications sector over the last decade have had significantly different effects on different groups of consumers, and in particular that the rich have benefited more than the poor. Heterogeneous consumer preferences are especially interesting to study in highly unequal developing countries like South Africa, where the discriminatory policies implemented during apartheid have resulted in a deeply divided society. For example, the results of the first contribution show how the regulation of mobile termination rates (MTRs, which were reduced by 90% between 2009 and 2017) accounted for around 60% of the reduction in quality adjusted postpaid prices in South Africa, used mainly by high-income consumers. However, MTR reductions accounted for only 30% of the reduction in prepaid prices, typically used by poor consumers. Quality-adjusted prices and the effects of lower MTRs have previously been studied in developed countries where prepaid does not matter as much, and these studies have typically used average, aggregate price data or data on an individual operator. In this contribution, the effects of lower MTRs are evaluated using a unique dataset on 2,773 operator-level mobile tariffs over the period between 2009 and 2017 in a developing country, South Africa. The variation in prices at the operator level is further exploited to show that on-net and off-net prices converged as a result of lower termination rates. This reduces the ability of firms with market power to use high MTRs to generate tariff-mediated network effects to exclude rivals. In the second contribution, the effects of consumer heterogeneity are further explored by developing a structural model of demand and supply in a discrete-choice framework. We test for the distributional effects of regulation and entry in the mobile telecommunications sector in a highly unequal country, South Africa. Using six waves of a consumer survey of over 134,000 individuals between 2009-2014, we estimate a discrete-choice model allowing for individual specific price-responsiveness and preferences for network operators. Next, we use a demand and supply equilibrium framework to simulate prices and the distribution of welfare without entry and mobile termination rate regulation. We find that regulation benefits consumers significantly more than entry does, and that high-income consumers and city-dwellers benefit more in terms of increased consumer surplus. In the third contribution, we exploit the discriminatory roll-out of fixed-lines during apartheid to Whites-only areas to study fixed and mobile substitution, using the same survey data. In our discrete-choice model, individuals choose fixed or mobile voice and data services in a framework that allows them to be substitutes or complements. We find that voice services are complements on average but data services are substitutes. However, many consumers see data services as complements. Our results show that having a computer and access to an internet connection at work or school are more important than reducing mobile data prices by 10% in driving broadband penetration.