Predicting diffusion dynamics and launch time strategy for mobile telecommunication services: an empirical analysis

Information technology (IT) innovations require strategic planning for issues related to the launch time of the new generation, technological advancement, and potential user base. The present study seeks to develop a decision-making model that effectively facilitates the predictive analysis of the diffusion paradigm for multi-generational services and the optimal timing of new service introduction. This paper analyzes the generation substitution and customer attrition behavior simultaneously in the adoption process of service generations. A novel multi-generational diffusion model is proposed for those service innovations that coexist in the market at the same time and divides the firm’s market shares. Also, the proposed study intends to devise a decision model to assess the launch scenarios for a new service generation. The optimization problem takes into account the trade-off between the preceding generation’s subscription level and service development cost. The proposed methodological framework is implemented on the telecommunication service line. An empirical analysis is conducted to examine the model performance and prediction ability as compared to the existing models. The findings show that the parameter estimation using the proposed diffusion model will lead to unbiased parameter values and better forecasting results. A numerical illustration is provided to solve the proposed optimization problem using the multi-attribute utility theory (MAUT). Moreover, sensitivity analysis is performed on critical parameters to examine their impact on the computational results. The present research on optimal introduction time of a new service generation yields crucial managerial insights for businesses and policymakers.