「ITiP」 Nam, C., Kwon, Y., Kim, S., & Lee, H. (2009). “Estimating scale economies of the wireless telecommunications industry using EVA data”. Telecommunications Policy, 33(1), 29-40.
Lab: information Technology Industry Pathfinder
Professor: Youngsun Kwon
Title: Estimating scale economies of the wireless telecommunications industry using EVA data
Authors: Changi Nam, Youngsun Kwon, Seongcheol Kim, Hyeongjik Lee
Journal: Telecommunications Policy
This paper proposes a new estimation method of total cost and average cost curves and applies it to the telecommunications industry. The method is more flexible and entails less hassle for data collection than traditional methods. The results show that the long-run average cost (LRAC) curve is downward sloping, revealing the presence of economies of scale in production. The two largest Korean mobile network operators are realizing full economies of scale, while the smallest operator is not. Finally, the paper recommends three policy alternatives that the Ministry of Information and Communication of Korea can draw on to increase efficiency in the Korean mobile telecommunications market.
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