The Mobile Broadband and Fixed Broadband Battle in Swedish Market: Complementary or substitution?

Abstract

This paper aims to investigate the current broadband situation in Swedish market, in particular whether the mobile broadband (MBB) is a complementary or substitute service to fixed broadband (FBB) by using multinomial logit model. The data is collected from the Post- och telestyrelsen (PTS) survey in 2009 together with a secondary data on price of broadband service for each service providers. The findings indicate that price and type of housing are the major determinant for broadband connections. In addition, the living area and service provider affect the probability of using broadband. Considering the own price elasticities, cable is more inelastic compared to DSL, LAN/Fiber and MBB while the cross price elasticities show that MBB is complementary service to FBB in Sweden at this stage. However, the cross price elasticities of FBBs and MBB report that there is high possibility that MBB could be substitution service to FBB in the near future.