How the Rapid Development of VoIP Technologies Affects Consumer Welfare and the Market

Jeong Ho Kwak, Bong Gyou Lee

Research output: Contribution to journalArticle

Abstract

The impact of Voice over Internet Protocol (VoIP) growth on other telecommunication services, such as landlines and mobile telephony, has gained significant interest in Korea recently. An emerging alternative to landline telecommunications, VoIP is experiencing explosive growth in demand and is providing significant economic utility to consumers. The rapid growth of smart phones has also created a considerable amount of controversy regarding the potential impact of VoIP on the mobile phone market. This study provides quantitative estimations of consumer surplus for landline, mobile and VoIP services in the Korean telecommunications market using monthly call data from January of 2006 to June of 2009, a period when VoIP services grew rapidly. Empirical analyses are conducted to estimate consumer surplus based on the demand functions of each telecommunication service. Additional analyses are conducted on consumer surplus change as well. Policy implications for the rapid growth of VoIP and its impact on consumer surplus change are also discussed.

Original languageEnglish
Pages (from-to)243-257
Number of pages15
JournalGlobal Economic Review
Volume41
Issue number3
DOIs
Publication statusPublished - 2012 Sep 1

All Science Journal Classification (ASJC) codes

  • Business and International Management
  • Economics, Econometrics and Finance(all)
  • Political Science and International Relations

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