Threat of Entry, Complete Information and Pricing

This paper analyses the impact of new market entrants on the pricing patterns of the mobile network operators in the East African Community under complete information. The study verifies whether incumbent mobile network operators within the East African Community engage in limit pricing when faced with threat of entry by analysing the pricing patterns of 21 incumbent mobile network operators for the period 2000-2019 within the Community’s member states. The study examines panel data using geographical distance as a proxy to the threat of entry. The results reveal that the pricing patterns of incumbent mobile network operators are consistent with limit pricing.