Concentration of the mobile telecommunications markets and countries’ competitiveness

This study examines how the level of concentration of a country’s mobile telecommunications market affects its competitiveness. We created a unique database with information on 59 countries, which we used to perform several estimations including an instrumental variable approach to explain the degree of concentration in mobile phone markets. Our first and direct estimation shows that the higher the concentration in the mobile market, the lower the countries’ competitiveness. A higher degree of concentration in the mobile phone markets causes, on average, a reduction of 0.45 points (it is a scale of 1 to 7) at the level of digitization of the countries’ economies. We also find that on average, higher levels of digitization correlate positively with higher competitiveness. Our results suggest that regulations that aim to promote competition in mobile phone markets may generate positive externalities on other sectors of the economy.