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Effects of Digital Transformation and Network Externalities in the Telecommunication Markets

Author

Listed:
  • Radukić Snežana

    (University of Niš, Faculty of Economics, Serbia)

  • Mastilo Zoran

    (University of East Sarajevo, Faculty of Business Economy, Bijeljina, Bosnia and Herzegovina)

  • Kostić Zorana

    (University of Niš, Faculty of Science and Mathematics, Serbia)

Abstract

The main purpose of the paper is to address the effects of digital transformation in the telecommunications markets which are characterized by network externalities. By acknowledging disruptive effects of digital transformation age, the paper highlights challenges which were created by advancement of technological capabilities. The specific aim of the paper is to present a methodological framework for measuring the information society. The research will be based on an analysis of the number of subscribers by types of telecommunication services, in developed and developing countries, in the last two decades. In this regard, increasing the number of subscribers leads to higher value of the selected network. We expect confirmation of both hypotheses respectively (H1: Digital transformation affects the simultaneously continuous growth of the number of subscribers and the continuous decline in prices of telecommunication services; H2: There are similar trends in developed and developing countries, which are related to the number of the telecommunication services subscribers). Therefore, digital transformation and the effect of network externalities contribute to increasing the number of subscribers, reducing the number of networks (distortion of the market competition) and reducing the prices of telecommunication services.

Suggested Citation

  • Radukić Snežana & Mastilo Zoran & Kostić Zorana, 2019. "Effects of Digital Transformation and Network Externalities in the Telecommunication Markets," Economics, Sciendo, vol. 7(2), pages 31-42, December.
    • Handle: RePEc:vrs:econom:v:7:y:2019:i:2:p:31-42:n:8
    DOI: 10.2478/eoik-2019-0019
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    References listed on IDEAS

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    More about this item

    Keywords

    Digital Transformation; Network Externalities; Telecommunication Markets; Subscribers; Prices;
    All these keywords.

    JEL classification:

    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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