Handset Subsidy Regulation, Replacement of Handsets, and Quality Investments = Handset Subsidy Regulation, Replacement of Handsets, and Quality Investments

다국어 초록 (Multilingual Abstract)

The regulatory agency intervention of the carriers` handset subsidy competition is based on that the carriers are apt to provide handset subsidies excessively, and thus are reluctant either to invest for quality enhancement or to compete in service price. This paper examines this issue rigorously. Surprisingly, the result shows that if the handset subsidy regulation targets for quality enhancement, under broad condition, it has no effect on consumer`s replacement decision and carriers` quality decision. This result implies that in order to achieve the efficiency, the effective payment regulation is considered rather than individual handset subsidy regulation.