Fixed-mobile convergence in telecom markets: Evidence from Greece

The telecommunications market has significantly changed the last years with customer needs and competitive landscapes shifting in several ways. Fixed-mobile convergence in the telecom sector has been an interesting topic for a long time as important synergies, mergers and acquisitions between fixed and mobile operators are taking place all over the world. The main focus of these synergies is usually profit maximization by achieving economies of scale and by maintaining a market share and a loyal customer base. The current study investigates such a case between the largest mobile and fixed network operators in Greece during the period 2005-2015 and especially after 2008, the year that the fixed network operator (FNO) fully acquires the mobile network operator (MNO). On the methodological side, this paper uses the Cobb Douglas production function and applies linear regression analysis to measure and evaluate the performance of the two companies. The results show that after the year of the acquisition, both companies gradually reach optimal production cost conditions, while they maintain, in total, their customer base.