This study attempts to develop an econometric model to determine cellular telephone pricing on the basis of market structure and regulation for the Indian domestic market. The authors found out a positive relationship between concentration and pricing, whereas more competition of cellular service is associated with lower prices which in turn, stimulated market demand. Thus exerting a downward pressure on costs because of the economies of scale. In other words, market concentration and competition are determinants of prices and assist in evaluating of potential gains to reduce price rates towards the marginal cost of services. It is found out that concentration combined with an independent regulator is negatively correlated with telecom price performance, i.e., competition couples with independent regulation leads to more prices. The empirical analysis indicates that market structure is far from competition, and pricing competition strategies are less effective even though price is falling. The operators have resorted to non-pricing competition strategies, such as offer of a variety of service plans like prepaid calling card schemes as a means to attract new customers.

The mobile telephony and internet technology have structurally changed in the last two decades. As a result, the mobile communication became the premium service offering voice transmission with mobility, which is more common. The regulatory policy changes took place from natural monopoly to free market. As a result, telecommunication technology and the structure of demand of telecommunication services rapidly increased. Now telecommunication policy is making itself efficient for a multiplicity of operators to supply these services to business and consumers. For the last 20 years, mobile telephony and internet technology have dramatically changed the telecommunications sector. Mobile communications started as a premium service offering voice transmission with mobility. As the service became more common, mobile telephony challenged the notion of natural monopoly within the sector and unraveled a wave of regulatory change that had deeply changed the market structure of telecom industry.

Institutional and regulatory reform was generally spurred by the rapid evolution of both telecommunications technology and the structure of demand for telecommunications services, which has eliminated virtually all natural monopoly conditions, making it possible and efficient for a multiplicity of operators to supply these services to businesses and consumers. In turn, the new market and regulatory environment is having a substantial impact on the structure and organization of the industry. Technological advances in recent years made available mobile telecommunications services at an unprecedented scale. Technical progress is generally presumed to have brought about improvement in the revenue, range, quality and prices of telecom services as observed in many developing countries.

Telecom Market Structure, Rregulatory reforms, Econometric model, Rapid evolution, Telecommunications technology, Mobile telecommunications, Indian domestic market, Non-pricing competition strategies, Natural monopoly, Regulatory environment, Telecommunications services.