Access and Communication Pricing and Club Effect

Abstract

Network services are specified by external positive effects direct as well as indirect. So, the utility provided by a network service depends positively on the network size, the users of such a service. In this article, we focus on the direct externality, called also club effect: the access of new users improve user’s satisfaction. Thus, new access may affect the pricing of the telecommunications operator. It has been shown, theoretically, that there is a certain relationship between the access price and the network size. Therefore, we want to study, in this paper, the impact of the evolution of network size on the user’s access rate to the fixed telephone network on one hand, and to analyze, on the other hand, the relationship between the price of connection and that of traffic carried on such a network, which is none other than the communication service, and this is in the context of Tunisian telecommunications sector.

From a simple model globally significant, we conclude that the club effect is, in short-term, low enough to affect the pricing policy of the Tunisian incumbent in monopoly position. However, users of fixed telephony of Tunisie Telecom can benefit, in long-term, of a decrease in rates both of access and traffic carried on the fixed telephony network, notably the local and the long distance calls. In contrast, international communications behaves, in long-term, as an independent variable.