Economic determinants of global mobile telephony growth

Abstract

This study examines the substitution effect between fixed-line and mobile telephony while controlling for the consumption externality associated with telephone networks. A dynamic demand model is estimated using a global telecommunications panel dataset comprised of 56 countries from 1995-2000. Estimation results show the presence of a substantial substitution effect. Additionally income and own-price elasticities are reported. Analysis of impulse responses for price, income and network size indicate substantial mobile telephone growth is yet to be realised. However, price ceilings imposed in the fixed-line network can retard the growth of the mobile network.

Behind the scenes of the telecommunications miracle: An empirical analysis of the Indian market

“…On the contrary, in the estimation made by Gruber (2001) to a panel of Central and Eastern European countries a positive effect is found. More recently, Madden and Coble-Neal (2004) and Rouvinen (2006) estimate two Gompertz diffusion models on panels of heterogeneous countries. Madden and Coble-Neal (2004) separate the network effect from the pure substitution in usage.…”

“…More recently, Madden and Coble-Neal (2004) and Rouvinen (2006) estimate two Gompertz diffusion models on panels of heterogeneous countries. Madden and Coble-Neal (2004) separate the network effect from the pure substitution in usage. They show that the development of fixed lines has a positive effect on the diffusion of cellular phones (positive network effect), but the cross-price elasticity is positive (the two modes of communications are substitutes in usage).…”

Universal telecommunication service: A world perspective

“…Ahn and Lee (1999), using ITU country data for one year, find a complementary relationship between mobile and wireline. Madden and Coble-Neal (2004) with ITU country data for 1994-2000 in a lagged dependent variable model, estimate a substitution effect between mobile and fixed-line service. Banerjee and Ros (2004) find that technological substitution in some countries and economic substitution in others may explain differential patterns of development in global fixed and mobile telephony.…”

“…The estimated coefficient is not statistically significant. Madden and Coble-Neal (2004) do not use this data. Furthermore, we have no country data on whether a caller pays or receiver pays regime is in force.…”

Is fixed-mobile substitution strong enough to de-regulate fixed voice telephony? Evidence from the Austrian markets

“…SeeBarros and Cadima (2000),Sung et al (2000),Sugolov (2005),Madden and Coble-Neal (2004),Rodini et al (2003),Vagliasindi et al (2006),Ward and Woroch (2010). Some studies using data from the 80s and 90s or from developing countries or transition economies find some evidence for complementary effects or mixed evidence with regard to fixed and mobile access services, seeGruber and Verboven (2001),Hamilton (2003) andGarbacz and Thompson (2007).…”