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Usage and Diffusion of Cellular Telephony, 1998-2004

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Author Info
Michal Grajek
Tobias Kretschmer

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Abstract

In this paper, we study the dynamics of usage intensity of second-generation cellular telephony over the diffusion curve. We address two specific questions: First, does information about usage intensity over time allow us to draw conclusions about the underlying drivers of technology diffusion? Seconds, what effect does the existence and penetration of previous generations and other networks in the same generation on network usage intensity? Using an operator-level panel covering 41 countries with quarterly data over 6 years, we find that heterogeneity among adopters dominates network effects and that different technological generations are complements in terms of usage, but substitutes in terms of subscription.

ZUSAMMENFASSUNG - (Gebrauch und Infusion von Mobilfunktelefonie, 1998-2004)
In diesem Beitrag untersuchen wir die Dynamik der Gebrauchsintensität von Mobilfunktelekommunikation zweiter Generation (D-Netzwerk in Deutschland) in verschiedenen Phasen ihrer Marktdiffusion. Wir stellen zwei spezifische Fragen: Erstens, kann man an Hand der Informationen über die Gebrauchsintensität die zugrundeliegenden Treiber der Technologiediffusion identifizieren? Zweitens, welche Auswirkung haben die Existenz und die Marktdurchdringung der vorherigen Generationen und andere Netzwerke derselben Generation auf die Gebrauchsintensität eines Mobilfunknetzwerks? Mittels der Paneldaten auf Netzwerkbetreiberebene, die 41 Nationen vierteljährlich über 6 Jahre umspannen, finden wir, dass die Abonnentenheterogenität die Netzwerkeffekte dominiert. Außerdem stellt sich heraus, dass die unterschiedlichen Technologiegenerationen bezüglich der Gebrauchsintensität komplementär zueinander sind, jedoch bezüglich ihrer Subskription Substituten darstellen.

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Publisher Info
Paper provided by Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG) in its series CIG Working Papers with number SP II 2006-20.

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Length: 51 pages
Date of creation: Sep 2006
Date of revision:
Handle: RePEc:wzb:wzebiv:spii2006-20

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Related research
Keywords: Cellular telephony; diffusion; network effects; consumer heterogeneity; fixed-mobile substitutability;

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Find related papers by JEL classification:
L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods
O38 - Economic Development, Technological Change, and Growth - - Technological Change - - - Government Policy

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References listed on IDEAS
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. Jonathan Beck & Michal Grajek & Christian Wey, 2005. "Hypermarket Competition and the Diffusion of Retail Checkout Barcode Scanning," Discussion Papers of DIW Berlin 523, DIW Berlin, German Institute for Economic Research. [Downloadable!]
    Other versions:
  2. Christopher F Baum & Mark E. Schaffer & Steven Stillman, 2002. "Instrumental variables and GMM: Estimation and testing," Boston College Working Papers in Economics 545, Boston College Department of Economics, revised 14 Feb 2003. [Downloadable!]
    Other versions:
  3. Gruber, Harald & Verboven, Frank, 2001. "The evolution of markets under entry and standards regulation -- the case of global mobile telecommunications," International Journal of Industrial Organization, Elsevier, vol. 19(7), pages 1189-1212, July. [Downloadable!] (restricted)
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  4. 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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  5. Heli Koski & Tobias Kretschmer, 2004. "Entry, Standards and Competition: Firm Strategies and the Diffusion of Mobile Telephony," Review of Industrial Organization, Springer, vol. 26(1), pages 89-113, November. [Downloadable!] (restricted)
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  6. 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)
  7. Michal Grajek, 2007. "Estimating Network Effects and Compatibility in Mobile Telecommunications," ESMT Research Working Papers ESMT-07-001, ESMT European School of Management and Technology. [Downloadable!]
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  8. Liikanen, Jukka & Stoneman, Paul & Toivanen, Otto, 2004. "Intergenerational effects in the diffusion of new technology: the case of mobile phones," International Journal of Industrial Organization, Elsevier, vol. 22(8-9), pages 1137-1154, November. [Downloadable!] (restricted)
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  10. Farrell, Joseph & Klemperer, Paul, 2006. "Coordination and Lock-In: Competition with Switching Costs and Network Effects," CEPR Discussion Papers 5798, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  11. Daniel Birke & G. Swann, 2006. "Network effects and the choice of mobile phone operator," Journal of Evolutionary Economics, Springer, vol. 16(1), pages 65-84, April. [Downloadable!] (restricted)
  12. Doganoglu, Toker & Wright, Julian, 2006. "Multihoming and compatibility," International Journal of Industrial Organization, Elsevier, vol. 24(1), pages 45-67, January. [Downloadable!] (restricted)
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  13. 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. [Downloadable!] (restricted)
  14. Manuel Trajtenberg & Shlomo Yitzhaki, 1982. "The Diffusion of Innovations: A Methodological Reappraisal," NBER Working Papers 1008, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  15. Timothy F. Bresnahan & Robert J. Gordon, 1996. "The Economics of New Goods," NBER Books, National Bureau of Economic Research, Inc, number bres96-1.
  16. Swann, G. M. Peter, 2002. "The functional form of network effects," Information Economics and Policy, Elsevier, vol. 14(3), pages 417-429, September. [Downloadable!] (restricted)
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Cited by:
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  1. Luis Fernando Gamboa & Jesus Otero, 2008. "An Estimation Of The Pattern Of Diffusion Of Mobile Phones: The Case Of Colombia," DOCUMENTOS DE TRABAJO 005149, UNIVERSIDAD DEL ROSARIO - FACULTAD DE ECONOMÍA. [Downloadable!]
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