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Diffusion of mobile telephony: An empirical study in Taiwan

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Author Info

  • Chu, Wen-Lin
  • Wu, Feng-Shang
  • Kao, Kai-Sheng
  • Yen, David C.
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    Abstract

    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.

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    Bibliographic Info

    Article provided by Elsevier in its journal Telecommunications Policy.

    Volume (Year): 33 (2009)
    Issue (Month): 9 (October)
    Pages: 506-520

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    Handle: RePEc:eee:telpol:v:33:y:2009:i:9:p:506-520

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    Related research

    Keywords: Mobile communications Mobile telephony Technology diffusion Diffusion forecasting Deregulation;

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    Cited by:
    1. Lin, Chiun-Sin, 2013. "Forecasting and analyzing the competitive diffusion of mobile cellular broadband and fixed broadband in Taiwan with limited historical data," Economic Modelling, Elsevier, vol. 35(C), pages 207-213.
    2. Dewenter, Ralf & Kruse, Jörn, 2010. "Calling party pays or receiving party pays? The diffusion of mobile telephony with endogenous regulation," DICE Discussion Papers 10, Heinrich‐Heine‐Universität Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).

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