Deregulation,competition, and the network size in the market for telecommunication services

This paper analyzes the networking aspect in telecommunication services and the recent divestiture and increased competitiveness of the industry. The product considered is the right to access the network. The utility of a consumer from having access to a network depends on the network's quality, defined by the number of other local and long-distance consumers which can be reached. Network services are provided in two layers; On the lower layer consumers within a local access and transport area (LATA) are connected to a central office which provides the basic switching facility for local telecommunication. On the upper layer, LATAs are connected together by an interLATA carrier, to enable long distance communication from different localities.It is shown that relative to the choices of an unconstrained monopolist, larger networks at both layers may be obtained by imposing quality controls, while price controls may have the opposite effect. A divestiture policy in which all local carriers are connected to a single long distance carrier is likely to reduce the quality of services at both layers. Introducing competition among long-distance carriers further reduces the quality of long distances services but may improve the local service.     

Religiosity and the adoption of formal financial services

Recent studies have suggested that institutional and economic factors are important drivers of financial inclusion. However, the effects of culture on the usage and adoption of formal financial services are not as widely understood. This paper explores the impact of religiosity on financial inclusiveness, utilizing aggregated data from individuals’ religious preferences and financial behaviors. The results suggest that higher levels of religiosity are negatively associated with the usage and adoption of formal financial services, both across U.S. states and across different countries. To explore possible causal implications, we exploit spatial variations in historical pathogen prevalence as the main instrument of our study.     

The adoption of Web 2.0 services: An empirical investigation

The paper investigates the factors associated with the intensity of use of three Web 2.0 services - video sharing, social networking and social bookmarking - by looking at the users' characteristics and at the technological features. It relies upon a theoretical framework that combines the diffusion of innovation model with the technology acceptance model. However, it goes beyond them by focusing not simply on the determinants of adoption, but on the determinants of the intensity of use, and by introducing variables related to the social influence. The empirical analysis is based upon a survey of 300 users of Web 2.0 services. We find that the compatibility with users' needs and behaviours plays an important role for the intensity of usage of both video sharing and social networking services, while the ease of use positively affects the intensity of usage of social networking services, but has a negative effect on the intensity of usage of video sharing services. Extrinsic job-related motivations are important drivers of the intensive usage of social bookmarking and social networking services, while sharing contents is relevant for video sharing and social networking services. Finally, individual characteristics such as age, education and IT endowment also play an important role.     

The adoption of new technology by listed companies: the case of Twitter

This study investigates the adoption of Twitter by Australian listed companies for disseminating marketing information (including corporate promotion) and for directly interacting with consumers. Based on a sample of the Top 200 Australian Securities Exchange (ASX) listed companies, we find that companies with larger market capital are more likely to adopt Twitter for static advertising, a one-way communication approach, and direct interaction with consumers, a two-way communication approach. Companies with smaller market capital that adopt Twitter for marketing communication appear to disseminate more corporate promotion information, a static advertising approach. Overall, our results indicate that the level of a company's access to resources can influence their adoption of a new technology and the manner in which it is used. This study calls for further clarification of regulation regarding marketing communication on social media and experience sharing between industry practitioners.     

Critical mass of users versus critical mass of services in a multiproduct information service system

In this paper we study the economic behaviour of the suppliers of a set of advanced telecommunications services with a joint adoption cost (common access facilities, learning process, etc.). In fixing the two-part tariffs for their services the suppliers have to share the burden of leaving to the users a surplus sufficient to cover the adoption cost. The lack of coordination in supplying a critical mass of services or in the pricing decisions has high changes to result in suboptimal or unviable diffusion of the new technology as a whole. We present a static optimization model of user behaviour, and derive access and usage demand with a two-part tariff and a joint adoption cost. We compare noncooperative and cooperative market equilibria in a duopoly with perfect information; finally we discuss the extension of our analysis to the case of imperfect information in a dynamic setting.     

Broadband connected employees and labour productivity: a comparative analysis of 14 European countries based on distributed Microdata access

In this study, the association between information and communication technology (ICT) intensity in firms and labour productivity is explored across 14 European countries for the years 2001–2010. ICT intensity is approximated by the proportion of broadband internet-enabled employees, a novel indicator measuring not only adoption but also diffusion within and among firms. Data have been retrieved by means of the distributed microdata approach (DMD) from registers on business, trade and education as well as from surveys on production, ICT usage and innovation activities in firms held at the national statistical offices. This pioneering approach allows access to otherwise confidential linked firm-level information in dimensions not earlier available. Pooled OLS estimations based on approximately 400,000 observations in harmonised and representative datasets show that in a majority of countries there is a significant and positive relationship between the proportion of broadband internet-enabled employees and labour productivity in firms. However, the strength of the relationship varies across countries and industries. Manufacturing firms receive 50% larger estimates than the services firms, while the latter instead experience the positive association more frequently.     

Standardization in electronic money

Abstract

Electronic money services are provided by the combination of Integrated Circuit (IC) cards and terminals. The compatibility of different brands of electronic money can be enabled by firms' joint adoption of standard terminals. In this paper, we analyse the effect of achieving compatibility among different brands of electronic money. We show that, if the unit production cost of a standard terminal is not so much different from that of a non-standard one, firms' joint adoption of standard terminals will increase the total sales of IC cards and the network size of terminals, thus raising consumers' surplus and firms' profits. On the other hand, if the unit cost of a standard terminal is so high that firms are discouraged from voluntarily adopting standard ones, the government may employ subsides to enhance efficiency. However, if the duty of implementing standardization is placed solely on the firms without subsidies, all the agents, including consumers and retailers, will be left worse off.     

Empirical study of broadband adoption using data from the 2009 Residential Energy Consumption Survey

Using 2009 data from the U.S. Energy Information Administration, a study of factors that influence broadband adoption is conducted. The data set includes previously studied demographic factors, as well as records associated with the household’s use of computers, television, pay television services, and broadband. Analysis of the data indicate that, when controlling for a number of demographic factors, the purchase of television services is positively correlated with broadband adoption, with consumers who purchase either cable or satellite television service adopting broadband at a higher rate than those who utilize over-the-air television services. The results suggest that consumers who prefer over-the-air television services may face a more substantial hurdle in broadband adoption, one that might be lowered through the availability of affordable stand-alone broadband services.     

Who you are or whom you know? Consumption interdependences in social networks

This paper presents an analysis of whether a consumer's decision to switch from one mobile phone provider to another is driven by individual consumer characteristics or by actions of other consumers in her social network. Such consumption interdependences are estimated using a unique dataset, which contains transaction data based on anonymized call records from a large European mobile phone carrier to approximate a consumer's social network. Results show that network effects have an important impact on consumers’ switching decisions: switching decisions are interdependent between consumers who interact with each other and this interdependence increases in the closeness between two consumers as measured by the calling data. In other words, if a subscriber switches carriers, she is also affecting the switching probabilities of other individuals in her social circle. The paper argues that such an approach is of high relevance to both switching of providers and to the adoption of new products.     

Access regulation and the adoption of VoIP

The introduction of packet-switched telephony in the form of Voice over Internet Protocol (VoIP) raises concerns about current regulatory practice. Access regulation has been designed for traditional telephony on public networks (PSTN). In this paper we analyze the effect of access regulation and retail price regulation of PSTN networks on the adoption of a new technology in the form of VoIP. In particular, we show that with endogenous consumer choice between PSTN and VoIP telephony, higher prices for terminating access to the PSTN network make VoIP less likely to succeed and lead to lower profits of operators that offer exclusively VoIP telephony.      

Choosing and using payment instruments: evidence from German microdata

Germans are still very fond of using cash. Of all direct payments transactions in 2008, cash accounted for an astounding 82 % in terms of number and for 58 % in terms of value. With a dataset that combines transaction information with survey data on payment behaviour of German consumers, we shed light on how individuals decide on their cash usage. We employ a two-stage empirical framework which jointly explains payment card ownership and the use of cash. Our results indicate that cash usage is compatible with systematic economic decision making. Consumers decide on the adoption of payment cards and then use available payment media according to transaction characteristics, the relative costs of cash and card usage, socio-demographic characteristics and their assessment of payment instruments’ characteristics. Importantly, older consumers use significantly more cash than younger consumers. We show that this difference in payment behaviour is not attributable to age as such but largely to differences in the characteristics of older and younger consumers. This suggests that the high cash intensity of older consumers cannot fully be attributed to the role of habit or to their slow adoption to new payment technologies.     

Factors and sustainable strategies fostering the adoption of broadband communications in an enlarged European Union

The paper presents the results of a study that attempts to identify the main components that influence the development of broadband communications and access services, along with the analysis of sustainable strategies for fostering its further development. The paper briefly provides the appropriate combination of the relevant factors, methods and technologies for faster adoption of broadband communication technologies, contributing to adoption and enabling more rapid social cohesion and the regional inclusion of the new member states. Three identified factors, based on the data from 2004, can be interpreted as a group of enablers and means, indicators of e-service usage and the information and communication technology sector environment. An appropriate combination of the proposed actions could be a valuable guide in planning and developing broadband adoption strategies in different European regions or countries.     

FDI, services trade and economic growth in India: empirical evidence on causal links

This article examines the linkages between inward FDI, services trade (export and import) and economic output using co-integration and VECM causality test. These linkages have been explored both at the aggregate and at the sectoral levels (manufacturing and services). The empirical findings confirm the long-run relationship among these variables. Causality results indicate the presence of bi-directional causal relationship between FDI and economic output as well as between services exports and economic output. The results also bring out feedback relationship between services export and FDI, reconfirming the presence of complementary relationship between the two. At the sectoral level, we find at least a unidirectional causality from FDI and services exports to both manufacturing and services output and also cross-sectoral spillover effects from manufacturing output to services output and vice versa.     

Predicting early adoption of successive video player generations

Early adopters play an important role in the innovation diffusion process. Over the past decades, many factors have been identified as predictors for early adoption of innovations. Less attention has been paid to the relationship between the early adoption of one generation of a specific product and the early adoption of successive product generations. This paper analyzes how early adoption of a new product generation depends on ownership, purchase experience and adoption times for previous generations of the same product. The paper develops predictive models of early adoption for four generations of video player products, based on a survey among 815 Australian consumers. The model allows the testing of various hypotheses. It is shown that previous generation variables outperform conventional socio-demographic and psychographic variables in predicting early adoption but also that the two variable types complement each other. The best predicting models include both previous generation and socio/psychographic variables. It is concluded that previous generation models have substantial merits for new product forecasting as they are more parsimonious than conventional models and the data required to estimate them is relatively easy to obtain.     

The diffusion of Internet telephony among consumers and firms: Current issues and future prospects

This paper analyses the current demand and market potential for Internet telephony—the transmission of voice over the public Internet or over a private Intranet—a technology that has attracted considerable attention as an appealing alternative to traditional telephony but that is likely to develop as a component within an integrated system of video, data and voice applications. The paper investigates technical, economic and social factors supporting and hindering the adoption of Internet telephony. In doing so, it relies upon the idea that the diffusion of Internet telephony is determined both by the attributes of the technological applications as perceived by the potential adopters, and by the characteristics of different users. According to this view, the research points out that relevant uncertainties reside on the demand side, particularly among residential users, and that in the future, businesses are more likely to adopt these applications than consumers. The assumptions concerning the future diffusion of Internet telephony are supported by the results of a survey carried out among a sample of Internet telephony service providers in Europe and North America.     

Moderating effect of personal innovativeness on mobile-RFID services: Based on Warshaw's purchase intention model

As telecommunication market becomes more competitive and the customers' expectations regarding services or products increases, understanding customer or market needs is at the center of successful telecommunication business.In this study, we attempt to explore the intention of using mobile services based on the Warshaw's purchase intention model. We also focus on a personal innovativeness in the domain of IT (PIIT) because we assumed that as characteristics of telecommunication services become increasingly sophisticated, personal innovativeness could be a key factor of telecommunication services usage. In this study, we examine whether PIIT has the moderating effect on purchasing mobile-RFID services.The result shows that both purchasability and perceived need collectively explain purchase intention of mobile-RFID services, as well as PIIT serves to moderate the relationship between perceived need and purchase intention of mobile-RFID services. The study findings also indicate that IT knowledge, responsiveness to IT news and ability to use mobile phone of customers are positively related with PIIT.     

ICT for financial access: Mobile money and the financial behavior of rural households in Uganda

Mobile money usage has expanded tremendously in Uganda, reaching over 40% of the adult population within 8 years of inception. We use data from 820 rural households to examine the effect of this financial innovation on their financial behavior. We find that using mobile money services increases the likelihood of saving, borrowing, and receiving remittances. The corresponding amounts of each service are also significantly higher among mobile money user households relative to their nonuser counterparts. We demonstrate that the mechanism of this impact is a reduction in transaction costs—a combination of transportation fares and service charges—associated with household proximity to mobile money agents. To illustrate the convenience of service proximity, we demonstrate that the household's likelihood and frequency of using mobile money services reduces with the distance to the nearest mobile money agent. This distance variable is then used to instrument for the potentially endogenous mobile money adoption. We finally perform propensity score matching to reinforce the robustness of our results; our results are consistent across all these specifications. The results imply that developing and enhancing access to and usage of pro‐poor financial products could be a first step to achieving greater financial inclusion.     

Estimating consumer preferences for online music services

This article analyses consumer preferences with regard to important attributes of online music services. Conjoint analysis and a random coefficient discrete choice model using Bayesian approach with Gibbs sampling are used to estimate the preferences. Based on the quantitative results, we use simulation to look at how a new pricing strategy and the threat of legal penalty for file sharing would influence the online music market. Findings include these: estimated willingness to pay for downloading one music file is significantly less than the actual price of the file; consumers are sensitive to longer search and download times for music files and very sensitive to the threat of legal action; and consumers are not sensitive to online music services broadening their catalogues. Finally, the simulation shows that a combination of increased transaction costs for illegal file sharing and lower-priced digital music files would inhibit illegal file sharing and bolster the number of people purchasing music legally from the online services.     

Toward a Wider Analysis of Market Definition: Theory and Evidence from the Turkish Telecommunications Industry

This article develops a novel approach to the analysis of market definition. The article empirically investigates the main components of market definition, such as market power, substitution, and the simultaneous interaction between the demand and its determinants for the fixed and mobile voice services. To this end, I employ the multivariate Johansen cointegration methodology and analyze the Turkish voice telecommunications industry. While the VECM analysis confirms the presence of a simultaneous long-term causality relationship among the variables, the Johansen normalization results reveal demand elasticities that enable the analysis of market power and fixed-to-mobile substitution. My findings suggest that the fixed and mobile voice services, which are traditionally viewed as separate markets, can be defined as products that compete in the single market.     

Paying for the environmental services of silvopastoral practices in Nicaragua

Agricultural landscapes can provide many valuable ecosystem services, but many are externalities from the perspective of farmers and so tend to be under-produced. This paper examines an effort to make direct payments for ecosystem services (PES) in an agricultural landscape. The Regional Integrated Silvopastoral Ecosystem Management Project is piloting the use of PES to induce adoption of silvopastoral practices in the Matiguás-Río Blanco area in Nicaragua. Silvopastoral practices could substantially improve service provision while retaining agricultural production, but they have found only limited acceptance among farmers. The Silvopastoral Project seeks to increase their adoption by paying farmers for the expected increase in biodiversity conservation and carbon sequestration services that these practices would provide. The Project developed an ‘environmental services index’ (ESI) and pays participants for net increases in ESI points. Although the Silvopastoral Project is still underway, it already appears to have succeeded in inducing farmers to increase substantially the use of practices that generate higher levels of ecosystem services. In the project's first two years, over 24% of the total area experienced some form of land use change. The area of degraded pasture fell by two thirds, while pastures with high tree density increased substantially, as did fodder banks and live fences. On-going monitoring indicates that these land use changes are in fact generating the desired services. Questions remain about the long-term sustainability of the approach, however. To ensure sustainability, long-term payments are likely to be needed, raising the question of how they will be financed. Payments by water users and by carbon buyers provide a partial answer to this challenge, but still leave many gaps.