Abstract

Due to the expansion of service-based competition in the telecommunications market, the business on VoIP (voice over internet protocol) has emerged in service market. In this paper, the mathematical model to examine the welfare effect of access charge in the telecommunication market through the new VoIP providers entering the market was analyzed. The study also analyzes the simple model in two markets with independent demands. This paper examines the social optimal access charge and the viable industry Ramsey optimal access charge according to the entering of VoIP in telecommunication market. So, it compared two results in order to find some economic conclusions. Next by extending the basic model into the model with interdependent demands of VoIP companies; the study also calculate the social optimal access charge and viable industry Ramsey optimal access charge and compare the obtained results. Finally, it discusses some policy-relevant conclusions for the telecommunication industry.

Key words: VoIP, social optimal access charge, second-best access charge, independent demand, interdependent demand.