We study substitution between fixed and mobile broadband services in South Africa using survey data on 134,000 individuals between 2009 and 2014. In our discrete-choice model, individuals choose fixed or mobile voice and data services in a framework that allows them to be substitutes or complements. We find that voice services are complements on average but data services are substitutes. However, many consumers see data services as complements. Our results show that having a computer and access to an internet connection at work or school are more important than reducing mobile data prices by 10% in driving broadband penetration and narrowing the digital divide. Dr Ryan Hawthorne is an expert in competition and economic regulation. He holds a PhD in Economics from the University of Cape Town, a Master’s degree in Economics from the University of the Witwatersrand and a BBusSc (Hons), University of Cape Town. He has extensive experience in the economics of regulation and competition, including leading the economic analysis for a number of major competition cases for the Competition Commission, regulatory proceedings for ICASA and many others. He is a co-founding Director of Acacia Economics.
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