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Economic determinants of global mobile telephony growth

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  • Madden, Gary G
  • Coble-Neal, Grant

Abstract

This study examines the substitution effect between fixed-line and mobile telephony while controlling for the consumption externality associated with telephone networks. A dynamic demand model is estimated using a global telecommunications panel dataset comprised of 56 countries from 1995–2000. Estimation results show the presence of a substantial substitution effect. Additionally income and own-price elasticities are reported. Analysis of impulse responses for price, income and network size indicate substantial mobile telephone growth is yet to be realised. However, price ceilings imposed in the fixed-line network can retard the growth of the mobile network.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 10828.

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Date of creation: 2004
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Handle: RePEc:pra:mprapa:10828

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Keywords: Telecommunications; fixed-line; mobile telephony;

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References

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  1. Ahn, Hyungtaik & Lee, Myeong-Ho, 1999. "An econometric analysis of the demand for access to mobile telephone networks," Information Economics and Policy, Elsevier, vol. 11(3), pages 297-305, September.
  2. Gruber, H. & Verboven, F.L., 1998. "The Diffusion of Mobile Telecommunications Services in the European Union," Discussion Paper 1998-138, Tilburg University, Center for Economic Research.
  3. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
  4. Nakil Sung & Yong-Hun Lee, 2002. "Substitution between Mobile and Fixed Telephones in Korea," Review of Industrial Organization, Springer, vol. 20(4), pages 367-374, June.
  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.
  6. Gruber, Harald, 2001. "Competition and innovation: The diffusion of mobile telecommunications in Central and Eastern Europe," Information Economics and Policy, Elsevier, vol. 13(1), pages 19-34, March.
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Cited by:
  1. Barth, Anne-Kathrin & Heimeshoff, Ulrich, 2012. "Does the growth of mobile markets cause the demise of fixed networks? Evidence from the European Union," DICE Discussion Papers 42, Heinrich‐Heine‐Universität Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
  2. Akematsu, Yuji & Abu, Sheikh Taher & Tsuji, Masatsugu, 2010. "Empirical Study of Effect of Deregulation, Competition, and Contents on Mobile Phone Diffusion: Case of the Japanese 3G Market," 21st European Regional ITS Conference, Copenhagen 2010: Telecommunications at new crossroads - Changing value configurations, user roles, and regulation 1, International Telecommunications Society (ITS).
  3. Andonova, Veneta & Diaz-Serrano, Luis, 2009. "Political institutions and telecommunications," Journal of Development Economics, Elsevier, vol. 89(1), pages 77-83, May.
  4. Sara Biancini, 2010. "Behind the Scenes of the Telecommunications Miracle: An Empirical Analysis of the Indian Market," CESifo Working Paper Series 3286, CESifo Group Munich.
  5. Wolfgang Briglauer & Anton Schwarz & Christine Zulehner, 2011. "Is fixed-mobile substitution strong enough to de-regulate fixed voice telephony? Evidence from the Austrian markets," Journal of Regulatory Economics, Springer, vol. 39(1), pages 50-67, February.
  6. Sheikh Taher ABU & Masatsugu TSUJI, 2010. "The Determinants of the Global Mobile Telephone Deployment: An Empirical Analysis," Informatica Economica, Academy of Economic Studies - Bucharest, Romania, vol. 14(3), pages 21-33.
  7. Shinohar, Sobee & Akematsu, Yuji & Tsuji, Masatsugu, 2012. "Migration factors among broadband services: Panel data analysis," 19th ITS Biennial Conference, Bangkok 2012: Moving Forward with Future Technologies - Opening a Platform for All 72543, International Telecommunications Society (ITS).
  8. Barth, Anne-Kathrin & Heimeshoff, Ulrich, 2012. "How large is the magnitude of fixed-mobile call substitution? Empirical evidence from 16 European countries," DICE Discussion Papers 49, Heinrich‐Heine‐Universität Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
  9. Sheikh Taher ABU, 2014. "Competition and Innovation in Telecom Sector: Empirical Evidence from OECD Countries," Informatica Economica, Academy of Economic Studies - Bucharest, Romania, vol. 18(1), pages 27-39.
  10. Garbacz, Christopher & Thompson, Herbert Jr., 2005. "Universal telecommunication service: A world perspective," Information Economics and Policy, Elsevier, vol. 17(4), pages 495-512, October.

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