Exclusivity, Bundling and Switching in Communications Markets

Abstract This thesis empirically analyses two case studies of markets associated with high-tech goods or services. In both cases the analysis includes an extensive literature review and in-depth study of market characteristics. These serve to inform the investigations and also provide technical background. The �rst part of the thesis examines the international distribution of the Apple iPhone and the incentives of the manufacturerto distribute the product exclusively to mobile network operators. The study uses a novel application of a double-hurdle model to analyse a cross-sectional dataset of 187 countries featuring industry-speci�c and demographic variables drawn from both o�-the-shelf sources and from an analysis of several hundred individual sources of evidence. The results show that the mechanisms determining the duration of exclusivity agreements di�er from those factors determining their initial imposition. In addition, it is shown that the level of competitiveness and concentration in the downstream market are signi�cant determinants of both the decision to sell in a country and the duration of any exclusivity agreements. The presence of competing technological standards is also shown to result in longer periods of exclusivity indicating slower di�usion of the product in these countries. The second part of the thesis empirically examines the incentives of individuals to switch provider of their household communication services in the presence of bundling of services. The study uses a random e�ects probit method to analyse survey data of 2,871 households' communication subscriptions. The results indicate that when service subscriptions are bundled there is a signi�cant reduction in the likelihood of an individual switching their provider. Furthermore, this e�ect is intensi�ed when the bundle includes services in which the provider specialises. The results of both studies are consistent with economic predictions of, respectively, the use of key di�erentiators by �rms to gain competitive advantages, and the use of bundling to create switching costs for consumers. Both studies represent signi�cant contributions to the study of vertical restraints, and consumer switching behaviour.

Name dc:type.qualificationname

phd

Level dc:type.qualificationlevel

doctoral

Grantor dc:publisher.institution

University of East Anglia

Year dc:date.issued

2013

Author dc:creator

• Burnett, Tim

Language dc:language

en