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Competition and Innovation in Telecom Sector: Empirical Evidence from OECD Countries

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  • Sheikh Taher ABU

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    The paper aims to analyze the effect of competition and innovation in OECD next-generation mobile phones (as a proxy for telecom sector) by examining factors affecting the diffusion pattern. A rigorous econometric model is estimated using the mobile telecommunications panel dataset comprised with the 19 OECD countries where at least 80% data are covered. The econometric model categorizes the variables as: (1) GDP per capita income and mobile user cost, (2) competition policies (3) telecom infrastructure (4) technological innovations (5) others such as role of MVNO (mobile virtual network operators), multiple standards for 3G as for the appropriateness of the outcome. The study represents country specific influence in terms of mobile contents and technological innovations. A new and important empirical finding is that there are still many opportunities available for mobile network operators (MNO) in this region by providing better telecom infrastructure to support technological innovations and to upheaval decreasing trend of average revenue per user (ARPU). Besides, the most important factors are identified as high speeds and necessary time require for porting mobile number.

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    Article provided by Academy of Economic Studies - Bucharest, Romania in its journal Informatica Economica.

    Volume (Year): 18 (2014)
    Issue (Month): 1 ()
    Pages: 27-39

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    Handle: RePEc:aes:infoec:v:18:y:2014:i:1:p:27-39
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    1. Madden, Gary & Coble-Neal, Grant, 2004. "Economic determinants of global mobile telephony growth," Information Economics and Policy, Elsevier, vol. 16(4), pages 519-534, December.
    2. Fuentelsaz, Lucio & Maícas, Juan Pablo & Polo, Yolanda, 2008. "The evolution of mobile communications in Europe: The transition from the second to the third generation," Telecommunications Policy, Elsevier, vol. 32(6), pages 436-449, July.
    3. 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.
    4. Banerjee, Aniruddha & Ros, Agustin J., 2004. "Patterns in global fixed and mobile telecommunications development: a cluster analysis," Telecommunications Policy, Elsevier, vol. 28(2), pages 107-132, March.
    5. Rouvinen, Petri, 2006. "Diffusion of digital mobile telephony: Are developing countries different?," Telecommunications Policy, Elsevier, vol. 30(1), pages 46-63, February.
    6. Gary Madden & Ismail Saglam & Aaron Morey, 2010. "Auction Design and the Success of National 3G Spectrum Auctions," Working Papers 1002, TOBB University of Economics and Technology, Department of Economics.
    7. Garbacz, Christopher & Thompson Jr, Herbert G., 2007. "Demand for telecommunication services in developing countries," Telecommunications Policy, Elsevier, vol. 31(5), pages 276-289, June.
    8. Bohlin, Anders & Gruber, Harald & Koutroumpis, Pantelis, 2010. "Diffusion of new technology generations in mobile communications," Information Economics and Policy, Elsevier, vol. 22(1), pages 51-60, March.
    9. Minges, Michael, 1999. "Mobile cellular communications in the Southern African region," Telecommunications Policy, Elsevier, vol. 23(7-8), pages 585-593, August.
    10. Funk, Jeffrey L., 2007. "Solving the startup problem in Western mobile Internet markets," Telecommunications Policy, Elsevier, vol. 31(1), pages 14-30, February.
    11. 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.
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