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Getting connected : competition and diffusion in African mobile telecommunications markets

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  • Gebreab, Frew Amare

Abstract

The author studies the determinants of the diffusion of mobile telecommunications in Africa in a fixed effects model. He uses data from 1987-2000 on 41 African countries that have adopted cellular telecommunications technologies. He finds that competition is the driving force behind the mobile telecommunications explosion in Africa. Duopoly and triopoly markets grow significantly faster than monopoly markets, although growth does not appear to differ between the first two markets. Evidence of preemptive behavior is found in competitive sequential entries into the market, but the major effect of competition on diffusion occurs after the actual year of entry. The introduction of digital technology has a positive and significant effect on the diffusion of mobile phones. The presence of an incumbent-owned cellular operator has a negative effect on the diffusion of mobiles, suggesting an abuse of a dominant position by the incumbent fixed-line operator. However, privatization of the incumbent fixed-line cellular operator accelerates mobile growth and mitigates that negative effect.

Suggested Citation

  • Gebreab, Frew Amare, 2002. "Getting connected : competition and diffusion in African mobile telecommunications markets," Policy Research Working Paper Series 2863, The World Bank.
    • Handle: RePEc:wbk:wbrwps:2863
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Ogiemwonyi Arakpogun, Emmanuel & Wanjiru, Roseline & Whalley, Jason, 2017. "Impediments to the implementation of universal service funds in Africa – A cross-country comparative analysis," Telecommunications Policy, Elsevier, vol. 41(7), pages 617-630.
    2. Grzybowski, Lukasz, 2014. "Fixed-to-mobile substitution in the European Union," Telecommunications Policy, Elsevier, vol. 38(7), pages 601-612.
    3. Fink, Carsten & Mattoo, Aaditya & Rathindran, Randeep, 2003. "An assessment of telecommunications reform in developing countries," Information Economics and Policy, Elsevier, vol. 15(4), pages 443-466, December.
    4. Lukasz Grzybowski, 2008. "The Competitiveness of Mobile Telephony across the European Union," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 15(1), pages 99-115.
    5. Simplice A. Asongu & Jacinta C. Nwachukwu & Aqsa Aziz, 2018. "Determinants of Mobile Phone Penetration: Panel Threshold Evidence from Sub-Saharan Africa," Journal of Global Information Technology Management, Taylor & Francis Journals, vol. 21(2), pages 81-110, April.
    6. Lukasz Grzybowski & Chiraz Karamti, 2010. "Competition In Mobile Telephony In France And Germany," Manchester School, University of Manchester, vol. 78(6), pages 702-724, December.
    7. Amassaghrou, Soumaya & Gutiérrez-Hita, Carlos & Zhukova, Vita, 2022. "An assessment of the liberalization and the evolution of competition in the Moroccan mobile market," Telecommunications Policy, Elsevier, vol. 46(5).
    8. Molla, Alemayehu & Biru, Ashenafi, 2023. "The evolution of the Fintech entrepreneurial ecosystem in Africa: An exploratory study and model for future development," Technological Forecasting and Social Change, Elsevier, vol. 186(PA).

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