Strategic investment timing under asymmetric access charge regulation in telecommunications

In a liberalized telecommunications market, an incumbent has several advantages over any entrant. An asymmetric access charge regulation for two such asymmetric firms stimulates competitive investment. We show that an entrant with a cost disadvantage has an incentive to invest as a leader under an asymmetric access charge regulation. These results fit well with the findings of previous empirical work. Moreover, we also investigate the effects of an asymmetric access charge regulation on competitive investment strategies.