Three Private Firms and an Independent Regulator are Sufficient for Rapid Mobile Network Penetration
Code:
11-01
Authors:
Li, Y. & Lyons, B.
Date:
01 Jan 2011
Abstract
Three Private Firms and an Independent Regulator are Sufficient for Rapid Mobile Network Penetration
By Li, Y. & Lyons, B.
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 a non-monotonic effect of market structure, with three firms maximising consumer uptake. Privatization and independent regulation are also important positive factors. Further results show that the market structure effect works only partially through the level of prices.
