Entry,Standards and Competition: Firm Strategies and the Diffusion of Mobile Telephony

This paper studies the effects of a countrys regulatory setting and competitive environment the performance of second-generation (2G) mobile on telecommunication. We consider three dimensions of sector performance: entry time, service prices and diffusion. We address the question of non-random selection arising from cross-country differences in the timing of the commercialization of new technologies. Our empirical exploration shows that this type of sample selection may indeed be a substantial problem in cross-country studies on technology diffusion and yield biased estimates of the policy variables of interest. Our estimation results suggest that standardization accelerates 2G entry and diffusion, although within-standards competition triggers less aggressive price competition than between-standards competition. We also find that an early monopolist will price more aggressively to build up an installed base. Furthermore, we find that liberalizing markets for incumbent technologies (i.e., fixed line telephony) has accelerated the commercialization of 2G.     

Strategic action and customer mobility: Antecedents and consequences of strategic actions in the Korean mobile telecommunication service industry

This paper investigates the sources and consequences of strategic actions in the Korean mobile telecommunication service industry. Based on competitive dynamics research and an organizational learning perspective, it suggests hypotheses and tests them with monthly data on service providers’ competitive and alliance actions, as well as statistics on monthly subscribers during 2002–2007. We show the positive effects of a firm’s own experience, other firms’ strategic actions, and firms’ alliance tendencies on the likelihood of firm-level competitive action and alliance. We also find that negative performance feedback accelerates the mimetic influence of rival firms’ competitive actions and that positive performance feedback strengthens the momentum effect of a firm’s own alliance experience on the likelihood of alliance. Both competitive actions and alliances appear to influence customer mobility across firms in a complex manner. Based on customer mobility data, this study finds that alliances increase market dynamism, that is, customer mobility. It also shows that competitive actions, in general, serve to effectively attract switching customers from rivals. This study partially answers questions regarding the triggers of competitive actions and alliance activities among mobile telecommunication service providers and their performance consequences.     

COVID-19 and changes in content usage behavior: The case of South Korea

This study examines changes in content usage time due to the COVID-19 pandemic in South Korea using Korean Media Panel data for the period 2011–2020 and explores the reasons for these changes. This study focuses on four principal contents: television programs, movies/videos/user-created content, traditional telecommunication services, and chatting/messenger/social network services. The empirical results indicate an increase in usage time for the four principal contents, as well as total content usage time because of the pandemic. The results also show that average Korean people stayed longer at home after the onset of the pandemic, leading to an increase in the time spent on all the principal contents, except for traditional telecommunication services, as well as an increase in total content usage time. Furthermore, this study suggests that whereas the effect of the pandemic on television program viewing time was mainly attributable to changes in time spent at home because of the pandemic, the effect on other contents was mainly caused by non-location-related factors. This study predicts changes in content usage time after the end of the pandemic and provides strategic suggestions.     

The diffusion of new telecommunication technologies

This article assesses the recent diffusion of new telecommunication technologies. Drawing upon an historical framework, the authors find that new technologies face significant barriers to rapid penetration in the home and office. Data on cable television, electronic text services, teleconferencing and alternative video distribution technologies are analysed to highlight the constraints facing the growth of new telecommunications services.     

Quantifying price-driven wireless substitution in telephony

For the better part of a decade, a non-trivial and steadily increasing share of households in the United States has come to rely exclusively on wireless technology for their voice communications needs. Aggregate data show clearly (1) that the share of wireless-only households has risen steadily in recent years; while (2) the price of wireless service has fallen substantially relative to traditional landline service. The aggregate data are therefore consistent with the hypothesis that wireless/wireline cross-price elasticities are positive and economically significant. However, econometric corroboration of this conjecture has proven elusive in the existing empirical literature, which has relied on datasets compiled at the turn of the millennium, when wireless substitution was very limited. Partly in response to this dearth of econometric evidence, regulators and competition authorities in the US have generally been reluctant to conclude that wireless voice service represents a meaningful economic substitute for traditional wireline telephony. In the absence of reliable econometric estimates, even the sign of the relevant cross-price elasticities is an open question: The majority of US households maintain both a landline and at least one wireless connection, so it is unclear, ex ante, whether the two services are substitutes or complements. Thus, it is critical to identify consumer behavior at the margin. Using state-level panel data from a relatively recent time period (2001-2007), this study develops and estimates a demand system that permits evaluation of the own-price, cross-price, and income elasticities of demand for wireless and wireline telephony in the United States. A one percent decrease in the price of wireless service is estimated to decrease the demand for fixed-line service by approximately 1.2-1.3%, and the parameter estimates imply that the Slutsky symmetry holds for the demand system. These results substantially exceed prior econometric estimates from the existing empirical literature, and provide evidence that wireless voice service has evolved into a strong economic substitute for traditional landline service. The parameter estimates from the demand system suggest that roughly two thirds of observed landline attrition in the United States over the sample period is attributable to the observed decline in the relative price of wireless service.     

The monopoly v competition debate

Arguments for and against monopoly and competition in the provision of telecommunication services are considered from the perspective of a dominant telecommunications operator in a small European country, Sweden. The importance of provision of public services is stressed as well as the need for efficient international standardization. Finally, it is argued that there is a parallel between the position of dominant telecommunication operators in small and medium-sized countries and the INTELSAT system.     

Whose call is it? Targeting universal service programs to low-income households’ telecommunications preferences

Do universal service programs give customers what they want? This paper uses new survey data to study low-income households’ telecommunications choices in the United States and to consider the degree to which such households’ preferences are addressed by existing universal service programs. The research shows that households that choose only one form of telecommunications increasingly are choosing a mobile phone, while those that choose to have both modes of communications are shifting their usage towards their mobile phones. These trends are less pronounced among higher-income households. One implication for universal service policy is that traditional subsidies for landline phones are increasingly ineffective in reaching low-income households such subsidies are designed to help; subsidies for acquiring and using mobile phone services might be more beneficial to low-income households than traditional subsidies for landline phones.     

Inequalities of opportunity in the access and use of telecommunication services in Togo

The liberalization of the telecommunications sector in Togo aimed at ensuring access to a better quality of telecommunication services at affordable prices to everyone. While the liberalization policy has increased competition in the sector and reduced significantly telecommunication services prices charged to costumers, statistics on the access and use of telecommunication services in Togo reveal disparities with respect to individuals' socio-economic characteristics which could be an indication of the existence of inequalities of opportunities in the access and use of these services.This paper investigates the inequalities of opportunity in the access and use of telecommunication services in Togo using a parametric approach. The results of estimations indicate that, inequalities of opportunities are larger for men and the elderly than respectively women and youths and are more pronounced in urban areas and regions such as the Plateaux and Savanna regions. Moreover, the circumstance variables such as the ‘place of residence’ and the ‘region’ are the key variables in explaining the inequalities of opportunities in the access and use of telecommunication services in Togo. So, policies toward reducing inequalities of opportunity in the access and use of telecommunication services in Togo should be designed with regards to men, the elderly, and people living in urban areas and regions such as the Plateaux and Savanna regions.     

US TV networks' response to new technology

The US television networks, so long the dominant force in US broadcasting, have seen their market shares and profits begin to fall as the new telecommunication services increase their penetration rates and fractionalize the viewing audience. In response to this competitive challenge, the networks have increased their offerings of news, bid high prices to retain the rights to professional sports, and decreased their reliance on theatrical movies. More importantly, the networks have themselves expanded into the new technologies in a number of different areas.     

Measuring the impact of telecommunication services on rural and remote communities

The potential benefits that telecommunication services bring to rural and remote communities are generally perceived as beneficial though difficult to ascertain. This article reviews the rationale and elements for measuring the impact of telecommunication services on rural and remote communities, and proposes some concrete ways forward based on current practice.     

Assessing new cell phone text and video services

The cell phone is a social medium developing into a multimedia digital platform that provides, obtains, and shares personal and social information. Thus, digital divide, social support, and privacy issues familiar to students of the Internet are here applied to understanding why people may be more or less interested in new text and video cell phone services. The first part of this study develops a basic model of demographic, social, and prior technology use influences on interest in three categories of cell phone text and video services derived from uses and gratifications studies of traditional and new media services—surveillance, entertainment, and instrumental. Hypotheses from this model were tested using data from an April 2007 US national random-digit dialing telephone survey. The by-now familiar digital divide demographics had both indirect and direct influences on assessments of these sets of services, although primarily for entertainment services (which were also negatively influenced by concerns about privacy threats). Surveillance services—here, providing location of family, friends and self to each other—were more positively assessed when family and friends lived closer, and with less prior communication technology use. Instrumental services—such as directions when lost and health emergency information—were more positively assessed by those with greater social support and a stronger belief in privacy rights. Thus, while overall only the entertainment services were even moderately explained, there were understandable differences in influences among the three sets of services, with demographic factors predominating.     

The effect of government 5G policies on telecommunication operators’ firm value: Evidence from China

To lead the world's fifth-generation mobile communication networks (5G) market, China introduced several policies to support 5G industry development that will impact telecommunication operators, the main implementers in this industry. Thus, this study examines the impact of the government's 5G policy announcements on telecommunication operators' firm value in China, where the state exerts a strong influence on industry development. We find that government policy announcement in general affects telecommunication operators' stock returns negatively, and when the government announces policies with a higher level of interference, the decline in firm value is more pronounced. To understand the comprehensive impact of 5G technology on telecommunication operators, we also examine the effect of institution-driven corporate technology R&D and investment activities on firm value. We find that the firms' 5G activities also decrease their firm value, and this effect is more significant than government policy announcements. These results imply that the market has a negative evaluation of the introduction of 5G technology due to its immaturity and uncertainty. This study provides a basis for understanding the market's views on 5G technology and development policies.     

What will be the possible barriers to consumers’ adoption of smart home services?

Recently, smart home services have come to the forefront as part of the growing market for the “Internet of Things.” Since these smart home services were introduced, they have been expected to grow rapidly. However, contrary to optimistic expectations for future market growth, the smart home market has appeared to hit a roadblock and remains at an early market stage. This study attempts to identify the possible barriers that consumers perceive when they are introduced to smart home services. Based on the resistance theory and perceived risk model, we investigate the relationship between perceived risk and resistance to smart home services, using technological uncertainty and service intangibility as the antecedents of perceived risk. Dividing perceived risk into four dimensions—performance risk, financial risk, privacy risk, and psychological risk—the empirical results show that these four risk types are affected by technology uncertainty and service intangibility, and the perceived risks, except for financial risk, have positive effects on the resistance to smart home services. When the survey respondents are divided into two types, postponers and rejecters, the result of postponers is similar with that of total sample, except that privacy risk is unimportant to postponers, and the result of rejecter cannot satisfy the recommended model fit.     

Telecommunications in developing countries

The conditions in which telecommunication services are established and expanded in the developing countries are very different from those experienced in the industrial nations. The author provides insight into the peculiarities of the telecommunication sector in developing countries, discussing characteristics related to the structure of the sector, system size and quality, telecommunications as a business, limitations to faster growth, and some particular problem areas, including the impact on economic development, especially in rural areas, training and education directed towards high technical and managerial positions, and the manufacture of equipment.     

Multimarket contact in Italian retail banking: Competition and welfare

This paper studies banks' competitive behavior on the deposit side of the Italian retail banking industry. We use a structural model to estimate demand for deposit services and test several supply models. We find that both the competitive, differentiated product Bertrand and the perfectly collusive models are rejected against partially collusive models with coalitions based on the participants' market contact. In the best fitting collusive model, the coalition includes 8 banks with at least 19 overlapped regions. Banks with extensive multi-market contacts tend to be less competitive and behave as if they were maximizing their profit jointly, taking into account the competitive fringe of smaller banks.     

Telecommunications in West Germany : The transformation of the technical and political framework

The most recognizable characteristic of the West German telecommunication infrastructure is the far-reaching isolation of networks, transmission services and terminal equipment. The completion plans of the West German PTT intend to end this separation. Using the telephone network as a base, all services will be integrated so that they are available from the telephone socket, acting as a communication socket for all transmission purposes. Concerning the political and legal framework, the main characteristic of the West German telecommunication sector is its high degree of regulation. This pattern of regulation is likely to change in 1988/89 with a new telecommunication law. The draft of this law proposes the deregulation of all transmission services (except the voice transmission service) and all terminal equipment markets. Networks shall continue to be owned by the West German PTT.     

ITU Plenipotentiary Conference and beyond : A case for serious foreign policy

The ITU Plenipotentiary Conference held in Nairobi in the Fall of 1982 was a significant international instrument for the conduct of telecommunication foreign policy. Growing demand for telecommunication services and products coupled with the economic and sociocultural impact of new technologies have resulted in greater global interest in the problems, issues and technical complexities of maintaining order in global telecommunication. A major theme of this article is that ITU deliberations and decisions are all part of the growing telecommunication foreign policy agenda and that the benefits of successful diplomancy are usually worth the costs of effective and coordinated domestic and international policy development.     

Servicing the media: freelancing, teleworking and 'enterprising' careers

This article examines the working lives of people offering services to the media on a freelance basis. Almost all work from home using information and communication technologies but isolation in the home is not the norm as most maintain extensive personal networks in the industry. Nevertheless, popular imagery of the 'electronic cottage' and the 'virtual organisation only superficially capture their experiences. Insecurity and weakness in the market are suggested by histories of redundancy and dependence on single client organisations including former employers.     

Municipal electric utilities’ role in telecommunications services

Municipal electric utilities (MEUs) are increasingly expanding into telecommunications services. Such entry is interesting in several respects. First, MEUs marry two potential pathways for the growth of telecommunications access infrastructure and services: public ownership of last-mile facilities and electric power company expansion into telecommunications. Second, municipalities are key early adopters of next generation access technology in the form of both fiber-to-the-home (FTTH) and broadband wireless (e.g., WiMax) systems. Third, MEUs are at the nexus of the debate over the proper role for local government in promoting broadband Internet access. Most homes in the United States are served by investor-owned local telephone and cable television providers, using company-owned wireline infrastructure. These providers have generally opposed municipal entry, arguing that it will crowd out private investment and represents an unfair and less efficient form of competition. A number of states have acted to limit—or in some cases—to promote such entry. Before engaging in this debate, it is necessary to have a clearer picture of the current state of municipal entry and the local demographic, cost, industry, and policy factors that influence its evolution. To address this need, this paper reports the results of an empirical analysis of MEUs that provide communications services to the public. This analysis shows that MEUs are more likely to offer such services if they also provide internal communication services to support their electric utility operations (scope economies); are relatively close to metropolitan areas (lower backhaul costs); are in markets with fewer competitive alternatives (cable modem and DSL service availability limited); and which are less encumbered by regulatory barriers to entry (in communities in states which do not restrict municipal entry into telecommunication services). Of these results, the competitive impacts are the least straight-forward to interpret, suggesting richer dynamics and avenues for further research.