Estimating Switching Costs in the Mobile Telecommunications Industry in the UK∗

In this paper I estimate the magnitude of switching costs in the UK mobile industry. Using a survey data with individual choices of network operators in two consecutive years I find a presence of very strong average switching costs, which make the majority of consumers reluctant to switch networks. The size of average switching costs differs significantly across networks and the observed switching may be due to heterogeneous switching costs across consumers. The willingness to switch networks depends to some extend on consumer’s characteristics.