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The Diffusion of Mobile Telecommunications Services in the European Union

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  • Gruber, H.
  • Verboven, F.L.

Abstract

We study the determinants of the diffusion of mobile telecommunications services in the European Union in a logistic model of technology diffusion. We find that the transition from the analogue to the digital technology during the early nineties, and the corresponding increase in spectrum capacity, has had a major impact on the diffusion of mobile telecommunications. The impact of introducing competition was also significant, during both the analogue and the digital period, though the effect was proportionately smaller. Finally, we find that countries which granted first licenses at later points in time, show a significant catching-up effect, though international convergence may be expected only by the year 2006. The empirical results remain robust when other possible determinants of diffusion are included, such as the size of the fixed network and GDP per capita.
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Suggested Citation

  • 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.
  • Handle: RePEc:tiu:tiucen:2ce83698-fb1f-490b-a986-e2983c31450c
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    References listed on IDEAS

    as
    1. Valletti, Tommaso M & Cave, Martin, 1998. "Competition in UK mobile communications," Telecommunications Policy, Elsevier, vol. 22(2), pages 109-131, March.
    2. Gruber, Harald & Verboven, Frank, 2001. "The diffusion of mobile telecommunications services in the European Union," European Economic Review, Elsevier, vol. 45(3), pages 577-588, March.
    3. Cramton, Peter C, 1995. "Money Out of Thin Air: The Nationwide Narrowband PCS Auction," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 4(2), pages 267-343, Summer.
    4. Jerry A. Hausman, 1997. "Valuing the Effect of Regulation on New Services in Telecommunications," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 28(1997 Micr), pages 1-54.
    5. Philip M. Parker & Lars-Hendrik Roller, 1997. "Collusive Conduct in Duopolies: Multimarket Contact and Cross-Ownership in the Mobile Telephone Industry," RAND Journal of Economics, The RAND Corporation, vol. 28(2), pages 304-322, Summer.
    6. Freeman, Chris, 1994. "The Economics of Technical Change," Cambridge Journal of Economics, Oxford University Press, vol. 18(5), pages 463-514, October.
    7. John McMillan, 1994. "Selling Spectrum Rights," Journal of Economic Perspectives, American Economic Association, vol. 8(3), pages 145-162, Summer.
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    More about this item

    Keywords

    technology diffusion; regulation and competition; mobile telecommuinications;
    All these keywords.

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

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