ABSTRACT: The speed of market penetration (i.e. diffusion) is an important summary measure of how well the market works for potential consumers of a new product. This paper identifies the structural features associated with rapid diffusion of mobile telephony. We use a sample of thirty countries over the sixteen years in which average penetration rose from 2% to 97% of the population (earlier studies observed only the initial years of diffusion during which there was typically only one or two networks). We find that the history of market structures matters and five firms maximise the speed of consumer uptake. The market structure effect does not appear to work exclusively through the level of prices. Digital technology, standardisation, privatization and independent regulation are also important positive factors, and we identify the speed and dimensions of catch-up.
KEYWORDS: Competition; market structure; privatization; independent regulator; mobile network; diffusion
CITATION: Li, Y. & Lyons, B. (2012) 'Market Structure, Regulation and the Speed of Mobile Network Penetration', CCP Working Paper 12-3