Fixed Mobile Substitution

In the early days of mobile phones, its interaction with fixed phones was uncertain. The introduction of mobile saw an increase in the use of fixed phones, with mobile users facing higher fixed phone bills compared with non mobile users. This trend was taken by some analysts and OFTEL as evidence that there were complementarities between fixed and mobile phones, and thus that mobile did not compete with fixed telephony.

We analysed consumers views and attitudes towards fixed and mobile phone use, using large-scale market surveys. Our analysis took into account the general increase of phone usage across different consumer segments, identifying that user access to a mobile phone was associated with lower expected fixed phone bills, due to some use being shifted to mobile.

Over time we prepared a short series of three reports, which were submitted to OFTEL’s Price Control Reviews. Our second and third reports are available for download.