Essays in Telecommunications Policy and Management

This work comprises three independent essays in Telecommunications Policy
and Management.

In the first study we focus on the deployment of green field next generation
access network infrastructures when the national regulatory authority has the
power to define geographical markets at sub-national level for which it can apply
differentiated regulatory remedies - Geographically Segmented Regulation
(GSR). Using a game theory model that we developed, we confirm the asymmetric
business case for the geographic development of these new infrastructures:
highly populated areas are likely to develop into competitive telecommunication
markets while regions with low household density will only see limited investment
and little or no competition. We show that supply side interdependencies
among markets make the implementation of GSR non-trivial, namely, we show
that changes in the wholesale access price in one market can have undesirable
consequences in the competitive conditions of interrelated regions where
wholesale prices are unchanged.

In the second study we focus on how individual purchase decisions are influenced by the behavior of others in their social circle. We study the case of
the diffusion of the iPhone 3G across a number of communities sampled from
a dataset provided by a major mobile carrier in one country. We find that
the propensity of adoption increases with the proportion of each indivudal's
adopter friends. We estimate that 14% of iPhone 3G adoptions in this carrier
were due to peer influence. We provide results from several policy experiments
that show that with this level of effect from peer influence the carrier would
hardly be able to significantly increase sales by selectively targeting consumers
to benefit from viral marketing.

Finally, in the third study, we perform a randomized field experiment to
determine the role that likes play on the sales of movies in Video-on-Demand
(VoD). We use the VoD system of a large telecommunications provider during
half a year in 2012. The system suggests movies to consumers ordered by the
number of consumer likes they obtained in previous weeks. We manipulated
such natural order by randomly swapping likes across movies. We found that
movies promoted (demoted) increased (decreased) sales, but the amount of information
publicly available about movies affected the result. Better known
movies were less sensitive to manipulations. Finally a movie promoted (demoted)
to a fake slot sold 15.9% less (27.7% more) than a true movie placed at
that slot, on average across all manipulations. A movie promoted (demoted)
to a fake slot received 33.1% fewer (30.1% more) likes than a true movie at
that slot. Hence manipulated movies tended to move back to their true slots
over time. This means that self-fulfilling prophecies widely discussed in the
literature on the effect of ratings on sales are hard to sustain in markets with
costly goods that are sufficiently well-known.