Social Optimality of Alternative Business Models

The social welfare research in communication services has its roots in the era of state owned Telco monopolies. In those circumstances the role of the regulator is to ensure that operators set the prices of their services in a socially optimal way. The services need to deliver utility value to consumers and at the same time allow the Telco’s to cover their costs and make a profit the price setting was originally studied in a single service set up – the Telco providing a fixed voice service to its customers in a monopoly environment.

Now the fixed telephony market is decreasing. The GSM, 3G markets and Internet Broadband access markets are saturating. The most interesting growing area in the Information Society is the Wireless internet access and the WLAN Hotspot services market.