Ex-ante evaluation of the consumers' preference for the 4th generation mobile communications service

Research about next-generation mobile communications (MCs) technology has become an issue in these days since MCs bear a close relationship to our daily lives. The third generation (3G) MCs technology is now evolving into the fourth generation (4G) MCs technology. An initial analysis of potential consumer preferences for the technology is essential to ensure successful strategies and changes. This paper attempts to apply a choice experiment to evaluating consumers' willingness to pay (WTP) for each attributes of the 4G technology. The experiment encompasses five attributes: data rates, the quality of communications service, the number of broadcasting channels, video-on-demand (VOD) service, and supplementary services. We consider the trade-offs between the price and attributes of the 4G for selecting a preferred alternative and derive the marginal WTP (MWTP) estimate for each attribute. The results indicate that the average MWTP for the improved communications service is KRW 4443 (USD 4.03) and the average MWTP for one more broadcasting channel is KRW 67 (USD 0.06). The average MWTPs for VOD and supplementary services is KRW 1932 (USD 1.75) and KRW 1601 (USD 1.45), respectively.

► We forecast consumers' value for the fourth generation mobile communications.
► We apply a choice experiment technique to eliciting consumers' willingness to pay.
► The quality of communications service will significantly affect consumer's utility.
► The number of broadcasting channels will significantly affect consumer's utility.
► Video-on-demand service will significantly affect consumer's utility.