Toward a wider market definition in broadband: The case of Turkey
As broadband Internet transforms the way people connect with others the boundaries between different modes of communications become vague. In recent years the scope of voice and broadband markets has become a matter of concern for both policymakers and researchers. Until recently it was thought that DSL and mobile broadband markets were separate markets and therefore they were separately regulated. However recent empirical evidence in some countries shows that fixed and mobile broadband services are likely to be substitutes. If this is true the definition of the relevant market for broadband has to be expanded to include mobile networks. This implies that they should be subject to the same regulatory framework. In order to follow this change we look into the Turkish broadband market as it is one of the fastest growing in Europe. The paper provides empirical evidence on the existence of fixed-mobile substitution in broadband Internet services in Turkey. We show that fixed and mobile broadband are substitutes in Turkey and they have to be included in the same relevant market definition. As differences between them in terms of speed reliability and price diminish customers increasingly see them as substitutes. These changes in the market environment require a reconsideration of the regulatory environment of fixed and mobile broadband markets. (C) 2015 Elsevier Ltd. All rights reserved.