Telephone Demand Over the Atlantic

Evidence from Country-Pair Data

by Jan Paul Acton, Ingo Vogelsang

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This report examines the determinants of international calling, both theoretically and empirically. It centers particularly on the role of prices to and from the United States and explains the volume of calling across the North Atlantic market. This market is important for economic and policy reasons, since the governments play a role in setting prices and terms of access; the net impact of calling affects the balance of payments between country pairs. The study is based on recent data on call use, along with detailed information about pricing structures. The period of analysis was one of rapid expansion in calling, important price changes, and deregulation of services in some countries. Consequently, these recent price estimates may be particularly relevant for contemporary policy deliberations.

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