ANALYSIS OF COMPETITIVE SITUATIONS AMONG KOREAN MOBILE CARRIERS USING ELASTICITY ESTIMATION
Competitive environments among the three dominant domestic mobile carriers in the oligopoly market structure were analyzed through four types of elasticity centering on the variable average revenue per user (ARPU). According to the analysis results of own-price elasticity in the oligopoly structure among the three carriers, none of the variables was statistically significant when all three mobile carriers were included in the analysis. This is attributed to the fact that, despite the application of the seemingly unrelated regression (SUR) panel model, the individual effects of the carriers were offset by the excessively large differentiation among the carriers. According to the analysis results of cross-price elasticity, for SK Telecom (SKT) was significant and cross-price elasticity was not significant. This result was attributed to SKT being a significant market player, so that the effects of the two other carriers are not big. To review the effects of income elasticity, increases/decreases in income elasticity according to income are considered unclear and demand for subscription to mobile communication was more elastic in the middle class. Finally, according to the results of competitive relationship elasticity, for the model for all three mobile carriers, only GDP per capita, which is a control variable, was significant in a positive (+) relationship. When comprehensively seen, changes in the current mobile communication service charge structures do not seem to greatly influence incentives for consumers or carriers’ sales structures. In addition, the effects of changes in charge structures on the intensity of competition among the three carriers do not seem to be large.
competitive environment, market share, financial performance, own-price elasticity, cross-price elasticity, income elasticity, competitive relationship elasticity.