An Analysis of Entry Barriers in the OTT Voice Communications Market

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Other Title
  • OTT音声通話サービスをめぐる参入障壁の分析
  • OTT音声通話サービスをめぐる参入障壁の分析 : 日本市場の例
  • OTT オンセイ ツウワ サービス オ メグル サンニュウ ショウヘキ ノ ブンセキ : ニホン シジョウ ノ レイ
  • 日本市場の例
  • The Case of Japan

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Abstract

Thanks to the ubiquitous penetration of broadband Internet and the rapid development of information and communications technology (ICT), facility-less service providers, or so-called Over-The-Tops (OTTs), have come into a viable existence since the late 2000s. OTTs have penetrated first into the online application sector, then into the video-distribution market, and finally into the simple voice communications market, which has long been regarded as the home turf of traditional telecommunications carriers. Theoretically speaking, the emergence of new competitors in the once-monopolistic voice communications market increases the number of options for consumers, enhances the service quality, and may rationalize the universal service framework in the telecom sector; all of these contribute to the improvement of social welfare. Thus, if there are some entry barriers for OTT voice service providers and if these barriers are hard to overcome due to some structural reasons, we should investigate whether any governmental intervention is justified. In this paper, in order to provide basic insights for the future policy discussion, the author empirically shows the size of entry barrier for OTT players and how it will be affected by possible inter-carrier negotiation, and points out the market failure where policy intervention may be required.

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