A potential risk of complex tariff structures is that consumers might misunderstand their own preferences and subscribe to inappropriate tariff plans. Consumers must of necessity spend a considerable amount of time to avoid such a situation, and the authorities may have to oblige telephone operators to inform their customers of the potential advantages and disadvantages of each tariff structure.

<u>Table 8. IV Estimation Results for Termination-Based Discriminatory Effects</u>

||Peak||Off-pe|ak|Off-off|-peak|
|---|---|---|---|---|---|---|
||(1)|(2)|(3)|(4)|(5)|(6)|
|_σ_|0.61 <sup>**</sup>|0.70 <sup>***</sup>|0.64 <sup>**</sup>|0.71 <sup>***</sup>|0.78 <sup>**</sup>|0.64 <sup>**</sup>|
||(0.25)|(0.19)|(0.26)|(0.20)|(0.30)|(0.26)|
|_lnMonthly_|-0.08|-0.26 <sup>*</sup>|-0.15|-0.39 <sup>**</sup>|-0.02|-0.51 <sup>***</sup>|
||(0.13)|(0.14)|(0.14)|(0.15)|(0.13)|(0.16)|
|ln_c _<sup>_Onnet_</sup>|-2.98|0.26|-6.15 <sup>**</sup>|-4.63|-0.25|-0.28|
||(2.57)|(2.75)|(2.75)|(2.95)|(0.63)|(0.80)|
|_Offnet_<br>_Offnet_<br>_c_<br>_TS_<br>ln<br>Δ|-17.82 <sup>*</sup>|-3.56|-28.39 <sup>***</sup>|-10.65|-0.31|-0.63|
||(10.62)|(10.10)|(8.64)|(8.02)|(1.00)|(1.19)|
|_e_<br>_FixedMobil_<br>_e_<br>_FixedMobil_<br>_c_<br>_TS_<br>ln<br>Δ|-17.47 <sup>*</sup>|-21.38 <sup>***</sup>|17.70|-24.34 <sup>***</sup>|0.70|-0.23|
||(9.80)|(5.55)|(14.59)|(6.34)|(0.97)|(1.21)|
|_lnN_|1.02|0.99|1.30 <sup>*</sup>|0.92|0.74|1.05|
||(0.75)|(0.74)|(0.79)|(0.78)|(0.78)|(0.95)|
|_D(Prepaid)_|4.23||3.03||1.39||
||(3.91)||(4.04)||(4.19)||
|_D(Fixed)_|-7.02||-40.33 <sup>***</sup>||-19.99 <sup>***</sup>||
||(9.02)||(12.37)||(4.21)||
|Business discount|3.93 <sup>*</sup>|2.97|4.05 <sup>*</sup>|3.68|0.43|1.14|
||(2.43)|(2.45)|(2.40)|(2.48)|(2.22)|(2.86)|
|Friend discount|1.60|1.70|0.80|1.76|2.03|1.53|
||(1.99)|(2.02)|(2.08)|(2.12)|(1.97)|(2.52)|
|Bundling|1.89|1.92|0.13|1.90|1.37|5.15|
||(3.21)|(2.87)|(3.39)|(3.05)|(3.56)|(3.93)|
|Voice mail|-6.07 <sup>*</sup>|-7.03 <sup>**</sup>|-1.14|-6.23 <sup>*</sup>|-3.46|0.10|
||(3.18)|(3.11)|(3.75)|(3.34)|(3.18)|(3.57)|
|International roaming|-0.21|-0.81|-3.27|-1.21|-1.48|-0.06|
||(2.37)|(2.42)|(2.47)|(2.47)|(2.64)|(3.38)|
|Constant|-21.83 <sup>*</sup>|-16.49|-33.14 <sup>**</sup>|-24.84 <sup>**</sup>|-14.49|-30.46 <sup>**</sup>|
||(12.67)|(11.45)|(13.43)|(12.39)|(11.72)|(13.14)|
|Obs.|78|78|78|78|78|78|
|R-squared|0.717|0.694|0.692|0.660|0.720|0.518|
|_F_-statistics|8.19|9.54|7.95|8.02|7.94|4.55|
|Ho: no termination-based discr|iminatory effects||||||
|<br> _F_-statistics|<br>3.80 <sup>**</sup>|7.79 <sup>***</sup>|5.42 <sup>***</sup>|7.38 <sup>***</sup>|0.76|0.16|
|Prob >_F_|0.028|0.001|0.007|0.001|0.474|0.852|

Note: The dependent variables is the logarithm of market share; The standard errors are shown in parentheses * 10% level significance; ** 5% level significance; and *** 1% level significance. Source: Author’s calculations.

The implied own-price elasticities are relatively high in absolute terms, compared with earlier studies. Based on the estimated parameters, the own- and cross-elasticities associated with monthly fees are calculated (Table 9). The average own elasticities are estimated at -0.26 and -0.56 for fixed-line and mobile telecommunications, respectively.<sup>29</sup>

> 29 The price elasticities are dependent on the estimated demand parameters, _α1_ , and _σ_ , as well as actual individual and within market shares (Ohashi, 2003).

30