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The evolution of markets under entry and standards regulation: the case of a global mobile telecommunications

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Author Info
Gruber H.
Verboven F.

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Abstract

We analyze the effect of government policies on the evolution of global mobile telecommunications markets during 1981-1997. We obtain the following findings. (i) Countries that issue first licenses at later dates converge relatively slowly to early moving countries. (ii) The introduction of competition has a significant impact on the diffusion, especially after capacity expanded (digital phase). (iii) The timing at which second licenses are issued is important. Sequential entry is preceded by pre-emptive behavior and has a stronger impact than simultaneous entry. (iv) For the analogue technology, setting a single technological standard speeds up the diffusion. The results can be explained by structural characteristics of the industry, such as capacity constraints, consumer switching costs and network externalities.

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Paper provided by University of Antwerp, Faculty of Applied Economics in its series Working Papers with number 1999038.

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Length: 58 pages
Date of creation: Dec 1999
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Handle: RePEc:ant:wpaper:1999038

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  1. Geroski, P. A., 2000. "Models of technology diffusion," Research Policy, Elsevier, vol. 29(4-5), pages 603-625, April. [Downloadable!] (restricted)
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  2. Jerry A. Hausman, 1997. "Valuing the Effect of Regulation on New Services in Telecommunications," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 28(1997-1), pages 1-54. [Downloadable!]
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Harald Gruber, 2002. "Endogenous Sunk Costs in the Market for Mobile Telecommunications - The Role of Licence Fees," The Economic and Social Review, Economic and Social Studies, vol. 33(1), pages 55-64. [Downloadable!]
  2. Michal Grajek & Tobias Kretschmer, 2006. "Usage and Diffusion of Cellular Telephony, 1998-2004," CIG Working Papers SP II 2006-20, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG). [Downloadable!]
    Other versions:
  3. James Prieger, 2008. "Product innovation, signaling, and endogenous regulatory delay," Journal of Regulatory Economics, Springer, vol. 34(2), pages 95-118, October. [Downloadable!] (restricted)
  4. Tomaso Duso, 2002. "On the Politics of the Regulatory Reform: Econometric Evidence from the OECD Countries," CIG Working Papers FS IV 02-07, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG). [Downloadable!]
  5. Cadima, Nuno & Pita Barros, Pedro Luis, 2000. "The Impact of Mobile Phone Diffusion on the Fixed-Link Network," CEPR Discussion Papers 2598, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  6. Prieger, James, 2005. "Endogenous Regulatory Delay and the Timing of Product Innovation," Working Papers 05-4, University of California at Davis, Department of Economics. [Downloadable!]
  7. Jukka Liikanen & Paul Stoneman & Otto Toivanen, 2002. "Intergenerational Effects in the Diffusion of New Technology: Case of Mobile Phones," Discussion Papers 809, The Research Institute of the Finnish Economy. [Downloadable!]
  8. Heli Koski & Tobias Kretschmer, 2002. "Entry, Standards and Competition : Firm Strategies and the Diffusion of Mobile Telephony," Discussion Papers 824, The Research Institute of the Finnish Economy. [Downloadable!]
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  9. Gebreab, Frew Amare, 2002. "Getting connected : competition and diffusion in African mobile telecommunications markets," Policy Research Working Paper Series 2863, The World Bank. [Downloadable!]
  10. Sangwon Lee & Justin S. Brown, 2008. "The Diffusion of Fixed Broadband: An Empirical Analysis," Working Papers 08-19, NET Institute, revised Sep 2008. [Downloadable!]
  11. Anabela Botelho & Ligia Costa Pinto, 2000. "Has Portugal gone wireless? Looking back, Looking ahead," Working Papers 5, Núcleo de Investigação em Microeconomia Aplicada (NIMA), Universidade do Minho. [Downloadable!]
  12. Fink, Carsten & Mattoo, Aaditya & Rathindran, Randeep, 2002. "An assessment of telecommunications reform in developing countries," Policy Research Working Paper Series 2909, The World Bank. [Downloadable!]
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  13. Philippe Gagnepain & Pedro Pereira, 2005. "Entry, Costs Reduction, and Competition in the Portuguese Telephony Industry," Working Papers 05, Portuguese Competition Authority. [Downloadable!]
  14. Andersson, Kjetil & Foros, Øystein & Steen, Frode, 2006. "Text and Voice: Complements, Substitutes or Both?," CEPR Discussion Papers 5780, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  15. Gagnepain, Philippe & Pereira, Pedro, 2005. "Entry, Cost Reduction and Competition in The Portuguese Mobile Telephone Industry," CEPR Discussion Papers 4993, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  16. Otto Toivanen, 2004. "Choosing Standards," Discussion Papers 937, The Research Institute of the Finnish Economy. [Downloadable!]
  17. Pedro Pereira & José C. Pernías-Cerrillo, 2005. "The Diffusion of Cellular Telephony in Portugal before UMTS: A Time Series Approach," Working Papers 08, Portuguese Competition Authority. [Downloadable!]
  18. Tommaso Valletti, 2003. "Is Mobile Telephony a Natural Oligopoly?," Review of Industrial Organization, Springer, vol. 22(1), pages 47-65, February. [Downloadable!] (restricted)
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