Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5078039 | International Journal of Industrial Organization | 2012 | 11 Pages |
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 16Â 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 both the number of networks and the history of market structures matter for the speed of consumer uptake. The market structure effect does not appear to work exclusively through the level of prices. Digital technology, standardization, privatization and independent regulation are also important positive factors, and we identify the speed and dimensions of catch-up.
⺠We identify the market structure that maximises diffusion of mobile phones. ⺠Unlike previous studies, we use data on the core period of diffusion from 2% to 97%. ⺠Diffusion is maximised with five private firms and an independent regulator. ⺠Price is only part of the way in which market structure affects diffusion. ⺠Multiple technology standards reduce the speed of diffusion.