Determination of optimum interconnection price: An analysis about operators and regulation Authorities

Abstract

The terms of access and interconnection are one of the most important issues in telecommunication sector. There is a big dispute about optimum interconnection price especially in some countries where calling party pay principle is applied. The dispute focuses on whether operators have achieved monopoly profit with reciprocal interconnection price and incumbent operator has created a banner for market entry. The result of related literature is differentiated according to assumed market structure. Although the general acception is the optimum interconnection price should be equal to the marjinal cost, in reality why the operators do not accept these prices still exists as an unanswered question.