ESTIMATING THE DEMAND FOR BROADBAND SERVICES IN BRAZIL: ANALYSIS BY A DISCRETE-CHOICE MODEL

ESTIMANDO A DEMANDA POR BANDA LARGA NO BRASIL: UMA ANÁLISE POR MEIO DE MODELOS DE ESCOLHA DISCRETA

ABSTRACT

Discrete-choice models were used to estimate the demand for broadband services in Brazil. Results indicate an elastic demand for fixed broadband. The demand price elasticity is greater for municipalities that rely on more than one economic group offering broadband: the monopoly will set the price for the broadband services to minimize competition between plans in the same category. Therefore, consumer’s capability to react to higher prices is reduced. In addition, the possibility of purchasing broadband services in tripleplay bundles has a positive effect on market share in those municipalities with two or more groups providing broadband services.

KEYWORDS:
antitrust; telecommunications; broadband; asymmetric competition; elasticity of demand