A new regional clustering approach for mobile telecommunications policy in China

• China has traditionally identified three groups of regions.
• The traditional regional classification seems too simple.
• A clustering approach shows that the 31 provinces can be classified into six groups.
• This new approach could be utilized for better mobile telecommunications policy.

In the Chinese telecommunications industry, the penetration rates of mobile telecommunications currently vary by province from less than 40% to over 100%. The purpose of this paper is to suggest a new regional clustering approach of China from the perspective of mobile telecommunications based on the diffusion characteristics of estimated innovation and imitation coefficients in the mobile telecommunications market. While China has traditionally identified three groups of regions, a cluster analysis based on those diffusion characteristics shows that the 31 provinces in China can be classified into six groups. This empirical result implies that the traditional regional classification seems too simple and that the market should be segmented further in order to develop policies more relevant to Chinese mobile telecommunications.