Unbundling the Incumbent and Entry into Fiber: Evidence from France

Arbeitspapier

We use panel data on 36,104 municipalities in metropolitan France over the period 2010-2014 to estimate two models of entry into local markets by: (i) alternative operators using wholesale access to the legacy copper network via local loop unbundling (LLU), and (ii) the incumbent and two alternative operators using the fiber technology. We find that a higher number of LLU competitors, and hence a less concentrated local market, has a positive impact on entry by fiber operators. Moreover, the presence of upgraded cable network in the local municipality stimulates fiber deployment. However, firms may choose to upgrade copper lines instead of investing in fiber networks. We use the estimates to calculate entry thresholds into local markets, which are substantially lower for broadband provision via LLU than via fiber and decrease over time. Fiber deployment becomes cheaper over time, but according to our estimates it will remain unprofitable for the vast majority of municipalities in France within the next years.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 7006

Classification and Topics

• Classification: Wirtschaft ; Regulated Industries and Administrative Law ; Oligopoly and Other Imperfect Markets ; Economics of Regulation ; Telecommunications
• Subject: fiber broadband ; local loop unbundling ; market entry

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Bourreau, Marc ; Grzybowski, Lukasz ; Hasbi, Maude
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2018

Further information

• Handle: http://hdl.handle.net/10419/180268
• Last update: 10.03.2025, 11:42 AM CET