Policy implications of market segmentation as a determinant of fixed-mobile service substitution: What it means for carriers and policy makers

The determination whether mobile and fixed telecommunications services operate in the same market not only affects business decision of service providers, but also has wide implications on public policy decisions pertaining to the means by which they should be regulated in the United States. This study conducts a two-stage cluster analysis implementing the American Customer Satisfaction Model on two datasets of 3251 and 5060 data points pertaining to mobile and fixed-line phone services, respectively, collected by the National Quality Research Center at the University of Michigan in order to determine whether the way consumers perceive these services can indicate as to their levels of substitutability. It concludes that different types of customers with different needs consume these products and offers policy makers some insight on how to further the penetration of mobile services.