Estimating switching costs in mobile telephony in the UK

This paper uses multinominal and mixed logit on British consumer panel data from 1999-2001 to estimate switching costs in mobile telephony. The results of the estimation show that consumers of mobile services in the UK face significant switching costs which vary according to network operators. Network operator choice is also explained by observed and unobserved heterogeneity in consumer tastes. Furthermore, the probability of switching depends on consumer characteristics such as age and the ways they spend their free time.