Research on Price Elasticity of Demand for Telecom
Research on Telecommunications pricing
Research on Telecommunications pricing
Prepared By:
Mina Ibrahim
Prepared By:
Mina Ibrahim
Contents
Contents 1
Executive Summary 2
Theoretical Background 3
The Theory of Price 3
The Demand Function 3
The Demand Function for Telecom industry 4
The availability and price of Substitutes & Complements 4
Research Background 6
The Egyptian Scenario 6
The Egyptian Company for Mobile Communications (Mobinil) 7
Important Milestones 7
Mobinil Market Position 9
Research Analysis and Results 10
Quantity Demand Analysis 10
Cross Demand Function 11 12
Regression Analysis 13
Research Conclusion 16
Executive Summary
Telecommunication is a fast growing industry which is promising its investors secured and growing revenue due to its important in every person’s life and day to day activities.
In particular, mobile telecommunications has been a new entrant to the industry. Starting in late 1990s mobile telecommunications achieved a huge growth in a small period of time. The ability to perform calls in any location to any required destination has been accepted and motivated by the users. The advance in technology has made the mobile products highly available to the public with different price ranges that vary based on the functionality and features produced.
On important aspect we will be discussing in this document is the minute rate pricing schema adopted by various operators in Egypt. Pricing has been and will be one of the most important aspects in any business and especially for service providers such as telecom operators.
There are two major categories in which pricing can depart from marginal costs as per Armstrong (Armstrong, 2001)
1. The problem caused by fixed and common costs, setting all the prices equal to the marginal costs will not allow the operator to break even 2. Pricing is usually determined in some ad hoc manner and may not reflect the costs at all, depending on that profits from one market may
Research on Telecommunications pricing
Prepared By:
Mina Ibrahim
Prepared By:
Mina Ibrahim
Contents
Contents 1
Executive Summary 2
Theoretical Background 3
The Theory of Price 3
The Demand Function 3
The Demand Function for Telecom industry 4
The availability and price of Substitutes & Complements 4
Research Background 6
The Egyptian Scenario 6
The Egyptian Company for Mobile Communications (Mobinil) 7
Important Milestones 7
Mobinil Market Position 9
Research Analysis and Results 10
Quantity Demand Analysis 10
Cross Demand Function 11 12
Regression Analysis 13
Research Conclusion 16
Executive Summary
Telecommunication is a fast growing industry which is promising its investors secured and growing revenue due to its important in every person’s life and day to day activities.
In particular, mobile telecommunications has been a new entrant to the industry. Starting in late 1990s mobile telecommunications achieved a huge growth in a small period of time. The ability to perform calls in any location to any required destination has been accepted and motivated by the users. The advance in technology has made the mobile products highly available to the public with different price ranges that vary based on the functionality and features produced.
On important aspect we will be discussing in this document is the minute rate pricing schema adopted by various operators in Egypt. Pricing has been and will be one of the most important aspects in any business and especially for service providers such as telecom operators.
There are two major categories in which pricing can depart from marginal costs as per Armstrong (Armstrong, 2001)
1. The problem caused by fixed and common costs, setting all the prices equal to the marginal costs will not allow the operator to break even 2. Pricing is usually determined in some ad hoc manner and may not reflect the costs at all, depending on that profits from one market may