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Competition effect of a new mobile technology on an incumbent technology: An Indian case study

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  • Gupta, Ruchita
  • Jain, Karuna

Abstract

Changes in mobile technology have radically altered people’s lives by improving their ability to communicate. New mobile technologies in the market offer enhanced voice capability, high-speed data service, and expanded service coverage. In India, the spread of second-generation mobile technologies—global system for mobile (GSM) and code division multiple access (CDMA)—has led to a dramatic rise in teledensity, from approximately 1% in 1985 to 76.86% in 2011. This presents an interesting opportunity to study the competitive effects of the two technologies. In this paper, we analyze the effect of a new technology (CDMA) on an existing technology’s (GSM) diffusion process and vice versa using an epidemic diffusion model that incorporates the competition effect. The results showed that the diffusion of CDMA was faster than that of GSM in India and CDMA diffusion had a positive effect on GSM. Further, despite competition, GSM continues to remain the dominant mobile technology in India. These findings offer useful insights into the diffusion process of mobile telephony in countries with multiple technology standards. They can potentially guide the design of diffusion strategies for future generations of mobile technology.

Suggested Citation

  • Gupta, Ruchita & Jain, Karuna, 2016. "Competition effect of a new mobile technology on an incumbent technology: An Indian case study," Telecommunications Policy, Elsevier, vol. 40(4), pages 332-342.
  • Handle: RePEc:eee:telpol:v:40:y:2016:i:4:p:332-342
    DOI: 10.1016/j.telpol.2016.01.001
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    Cited by:

    1. Avila, Luz Angelica Pirir & Lee, Deok-Joo & Kim, Taegu, 2018. "Diffusion and competitive relationship of mobile telephone service in Guatemala: An empirical analysis," Telecommunications Policy, Elsevier, vol. 42(2), pages 116-126.
    2. Barman, Hemanta & Dutta, Mrinal Kanti & Nath, Hiranya K., 2018. "The telecommunications divide among Indian states," Telecommunications Policy, Elsevier, vol. 42(7), pages 530-551.
    3. Ashutosh Jha & Debashis Saha, 2019. "Examining categorization of Telecom Circles in India using unsupervised k-means clustering on techno-economic indicators," DECISION: Official Journal of the Indian Institute of Management Calcutta, Springer;Indian Institute of Management Calcutta, vol. 46(4), pages 365-383, December.

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    Keywords

    Mobile technology; Diffusion; Competition; GSM; CDMA; India;

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