Diffusion of digital mobile telephony: Are developing countries different?

Factors determining the diffusion of digital mobile telephony across developed and developing countries are studied with the aid of a Gompertz model. After controlling for other factors, the speed of diffusion per se is not significantly different between the two groups of countries. Standards competition hinders and market competition promotes diffusion in both groups. Various factors are, however, more important in a developing country context: having a large potential user base, accumulating network effects, being open, commanding a high (non-telecom) technological level, and introducing innovation(s) complementing mobile telephony. Late entrants experience faster diffusion promoting cross-country convergence.     

Investigation of factors affecting the diffusion of mobile telephone services: An empirical analysis for Vietnam

This paper analyzes the diffusion of mobile telecommunications services in Vietnam and examines how telecommunications regulation and potential substitute/complement services affect the growth of the number of mobile telephone subscribers. Using a logistic diffusion model, it is found that fixed telephone services are a complement while data services have a negative relation to mobile telephone services in Vietnam. As for regulation, the policy of introducing competition has been found to be the most effective in influencing the adoption of mobile services. Another important result is that the estimated potential market is roughly 76% of the total population. The findings suggest that suitable regulation that guarantees competition in the mobile telecommunications market in a developing country such as Vietnam is one of the most important factors for a positive diffusion process.     

Diffusion of mobile telephony: An empirical study in Taiwan

Mobile telephony penetration is a major indicator of mobile telephony diffusion. Taiwan had a mobile telephony penetration of 108% in 2002, ranking first in the world. This study analyzes this accelerated diffusion in terms of growth model and determinants of the diffusion rate. To eliminate the inherent uncertainty associated with choosing the optimal growth model, this study compares the performance of three conventional models, namely Gompertz, Logistic and Bass, to identify the most appropriate model, and to distinguish the forces driving the diffusion rate. Empirical results indicate that the most appropriate model is the Logistic model. Network externalities, which this study shows to be the same as the imitation effect in the Bass model, explain the superiority of the Logistic model. Moreover, market competition, which markedly reduces service prices, is identified as a primary driver of the diffusion rate of mobile telephony in Taiwan. Economic conditions, technological innovation and number of operators are insignificant factors. Finally, mobile telephony is a substitute for fixed-line telephony in Taiwan.     

Diffusion and competitive relationship of mobile telephone service in Guatemala: An empirical analysis

The purpose of this paper is to analyze the characteristics of diffusion process of mobile telephone service and the competitive relationships between mobile and fixed-line services in Guatemalan telecommunications market. We investigated the best-suited model to explain the diffusion process of mobile telephone in Guatemala by estimating diffusion curves using empirical data. Moreover, we explored affecting factors which characterize the diffusion pattern of mobile telephony in Guatemala through statistical analysis. Finally, in order to understand the effects of competition in the diffusion process of Guatemalan mobile phone service, we attempted to clarify the competitive relationship between mobile and fixed-line services using the Lotka-Volterra model. As a result, the logistic model was found to be the best model for describing the diffusion pattern. Moreover, investment in telecommunications, the subscribers of fixed-line services, and the number of operators in mobile market were found as significant determinants of mobile diffusion process. Results from the Lotka-Volterra model showed that the relationship between mobile and fixed-line services has changed from pure competition to amensalism.     

Xiaolingtong versus 3G in China: Which will be the winner?

Xiaolingtong (XLT), a new type of mobile phone system based on PHS technology for wireless access of fixed-line telephone networks, has grown very rapidly in China. However, there are many doubts about the future of XLT once 3G (the third generation of mobile communication) is finally employed. This paper proposes a theoretical framework to assess and compare XLT and 3G from four perspectives: technology, market demand, business models and government policy. It concludes that XLT and 3G will coexist with existing 2G/2.5G mobile communication networks for a considerable period of time. With service collaboration and integration, the coexistence of both of these technologies can enhance China's mobile communication infrastructure and support the growth of mobile commerce.     

Diffusion of mobile telephony: Analysis of determinants in Cameroon

This paper explores the diffusion of mobile telephone technology in Cameroon by identifying and analyzing the determinants of this diffusion. Studying the diffusion of mobile communications in African countries by integrating them into panels of developing countries is problematic. This approach is likely to mask the intrinsic differences as concerns the diffusion process. This survey shows, through the estimation of an S-shaped growth curve, that the Logistic model best describes the diffusion of mobile phone technology in Cameroon. Income, openness to competition and the use of SMS are key forces driving this diffusion. Forecasts indicate an increase of almost 70% in the demand by 2026 as far as mobile phone use in Cameroon is concerned. This implies not only an improvement in operators' and State's revenues, but also, the need to invest in infrastructures. Our recommendation therefore calls for a greater liberalization of the mobile phone market in Cameroon. In addition, given the complementary relationship between the core and the mobile networks, infrastructural investments are also needed in both sectors.     

Forecasting organizational adoption of high-technology product innovations separated by impact: Are traditional macro-level diffusion models appropriate?

This study examines forecasting accuracy when applying macro-level diffusion models to high-tech product innovations among organizational adopters. In addition, it explores whether the accuracy of macro-level diffusion models differs according to the impact of the new product. As a benchmark for comparison, three types of basic diffusion models are compared to three simple trend extrapolation models. The role of innovation impact in explaining forecasting accuracy is also considered. These issues are addressed by empirically testing organizational adoption data for 39 new high-tech products. Results indicate that for radical innovations the Bass model is best while for incremental innovations an external influence model is best. However, simple trend extrapolation models produced the most accurate overall forecasts. The purpose of the study is to reintroduce an important topic and give practitioners better insight into forecasting the organizational adoption of high-tech products once initial sales data becomes available.     

Demand for telecommunication services in developing countries

Living standards and economic growth in developing countries are invariably linked to the availability and use of telecom services. Effective policy decisions require the best estimates of the drivers of these services. In this paper, telecommunications demand is estimated in models for residential mainline and mobile telephone service for developing countries for the period 1996–2003. The paper tests for cross-price effects between mainline and mobile service and its findings have important policy implications. It finds residential monthly price elasticity to be insignificant for developing countries, but the connection elasticity is larger than generally found in the literature. Mobile monthly price elasticities are very large. A new and important empirical finding is that although wireline phones are substitutes in the mobile market, the contrary is not true—mobile phones are not substitutes in the wireline market, and in fact may be considered complements. This lack of symmetry has important implications for properly defining telecom markets. Universal service subsidies and competitive market initiatives should be reevaluated in light of the paper's elasticity estimates. Increased competition, income growth and enhanced education may be the ultimate universal service promoters.     

Estimating consumer surplus in the mobile telecommunications market: The case of Korea

This paper estimates consumer surplus in the Korean mobile telephone services (MTS) market. The Korean mobile telecommunications market has grown rapidly since 1997 when competition was introduced and Code Division Multiple Access (CDMA) technology was commercialized. Because consumer surplus is relevant to the controversy over establishing an appropriate price level between consumers and service providers, the need for a robust measurement of benefit from MTS is increasing. The measured net consumer surplus estimated by means of elasticities of demand reached about US$48.8 billion in the period 1996–2004 and the changes amounted to about US$8.8 billion during the same period. In particular, after competition was introduced into the market with an accompanying price decrease and increase in the number of subscribers, consumers have benefited greatly. Therefore, it can be inferred that a facility-based competition policy and the reduction in price of access such as handset subsidies all played a positive role in the early diffusion of MTS in Korea. The estimated consumer surplus in this paper does not include network externality (option externality); if this were considered, the total social welfare of the consumer would be larger.     

Network effects and preference heterogeneity in the case of mobile telecommunications markets

This paper demonstrates how revealed- and stated-preference analyses can be used for modeling network effects in the field of mobile telecommunications. The aim of this study was to verify if network effects may still play a role in the Polish mobile telecommunications market, measure their strength, identify their sources and variability across consumers by accounting for consumers' observable and unobservable preference heterogeneity, evaluate their monetary value to consumers, and finally, to verify if the marginal utility associated with network effects is constant. The analysis of consumers' revealed choices (currently used mobile telephone operator) allowed the identification of major differences between customer bases of incumbent and new entrant operators, and insight into the business strategies adopted in the presence of asymmetric regulation of mobile termination rates. The second part of the study—the analysis of the consumers' stated choices (made in carefully prepared and designed hypothetical choice situations, known as the choice experiments) made it possible to directly model consumers' utility functions and, in this way, investigate the nature of network effects in mobile telecommunications markets. From the results, the presence of strong network effects, which are related to the ratio of consumers' social network group using the same operator, and to the magnitude of on-net price discounts, is confirmed. These network effects can be disaggregated to pecuniary and non-pecuniary effects. Through the utilization of the random parameters multinomial logit model, consumers' observable and unobservable preference heterogeneity can be accounted for, which proved a scientifically revealing and potentially policy-relevant approach. The results might be of a particular interest to other researchers aiming at modeling consumers' preferences as well as to mobile telephone operators and regulatory authorities—it is shown that capacity for vigorous price competition between mobile operators is limited by non-price factors, which affect subscriber's choices, especially in the presence of asymmetric mobile termination rates.     

Modelling and forecasting national introduction times for successive generations of mobile telephony

An accurate prediction of the timing of a country's introduction of a new generation of mobile telephony benefits numerous agents including suppliers of network and consumer equipment, regulators, and network planners. We consider the estimation and prediction of the time interval between the international introduction of a generation of mobile telephony and its introduction into a specific country when a decision maker judges the introduction of a newer technology a worthwhile investment. Using literature-based socio-economic and geographical variables, we examine how well variation in international introduction times of four generations of mobile telephony in 172 countries can be explained and forecast. We model and forecast introduction times at two levels of granularity: we use Cox's proportional hazards model for the introduction time; we partition countries into introduction time-based segments and model segment membership using multinomial logistic regression. Our modelling of each generation considers three subsets of explanatory variables: All variables, socio-economic Covariates only, Regional dummies only. Over successive generations, the Covariates only models reveal the changing relevance of each socio-economic covariate. Model-based forecasting of the introduction time of the next generation is performed under three hypotheses making different uses of the information available at the time the relevant generation is launched internationally. However, changing socio-economic environments coupled with changing models impair forecasting accuracy, the lower accuracy of modelled introduction times is concentrated in 20% of countries. We speculate about the nature of the unobserved factors affecting these countries' decision processes.     

An estimation of the pattern of diffusion of mobile phones: The case of Colombia

This paper examines the diffusion pattern of mobile telephony in Colombia. The empirical modelling approach adopted in the paper starts off by choosing between the two functional forms that are most frequently used in the literature, namely the Gompertz and the Logistic models. After applying a formal statistical test to choose the preferred functional form, the evidence suggests that the pattern of diffusion can be best characterised as following a Logistic model. The findings also suggest that despite the fact that in recent years the rate of growth of mobile phone subscribers has started to slow down, there still appears to be room for further expansion as the saturation level is expected to be reached in 2013. The estimated saturation level is consistent with some individuals possessing more than one mobile device.     

Are OTT messaging and mobile telecommunication an interrelated market? An empirical analysis

OTT messengers such as Facebook and WhatsApp have gained wide popularity among mobile users while the traffic of text messaging is in strong decline. As such, there is a debate over whether both services are interrelated and constitute a joint product market, which has important implications for the current wave of mergers in the mobile industry and regulation policy. To the best of our knowledge, this work is the first to provide an empirical analysis of how the consumption of OTT messengers affects demand for text messaging and mobile voice services. We make use of an innovative dataset which includes very detailed information on smartphone usage in Norway and consider a novel approach to address this question which is embedded in the complexity of two-sided markets. Interestingly, our findings suggest that OTT messengers complement demand for traditional mobile telecommunication services for this context. Consequently, both markets are interrelated but do not constitute a joint market from the perspective of competition policy in Norway. Moreover, we find an explanation for why reductions of text messaging usage have been so drastic in some countries and an analogous development for mobile voice is rather unlikely. Finally, our empirical results provide a new perspective on the modelling of consumer utility in communication networks in the theoretical literature.