Fixed and Mobile Broadband Substitution in the OECD Countries -- A Quantitative Analysis of Competitive Effects

In this paper we analyze the competitive effects between mobile and fixed broadband. We use the Lotka Volterra competition model, known from ecology, to analyze these competitive effects in the OECD area. The results suggest that mobile broadband demand is stimulated by a high demand for fixed broadband services. Hence, the majority of consumers does not view fixed broadband as a substitute for mobile broadband but rather complement their fixed broadband access with a mobile access. Reverse effects, i.e. a positive or negative influence of mobile on fixed broadband diffusion, are not clearly identifiable to the present. The results imply that mobile broadband diffusion at the moment does not strongly affect competition in the fixed broadband market. With regard to competitive strategies, the results suggest that bundling fixed and mobile broadband can indeed provide super-additive customer value.