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The Evolution of Markets Under Entry and Standards Regulation - The Case of Global Mobile Telecommunications

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  • Gruber, Harald
  • Verboven, Frank

Abstract

We analyse the effects of government policies, such as entry regulation and standard setting, on the evolution of an industry, the global mobile telecommunications markets during 1981-1997. Among other results, we find that countries that issue first licenses at later dates converge rather slowly and only partially, compared to early-moving countries. We find that introducing competition has a strong immediate impact on the diffusion rate, but a rather weak impact afterwards. Sequential entry is preceded by pre-emptive behaviour. These findings are consistent with the presence of consumer switching costs. Concerning standards, we find that setting a standard has a significant positive impact on diffusion for the analogue technology, but not for the digital technology. This suggests that the network advantages from having a single standard are offset by the benefits derived from the battle for developing more efficient digital systems.

Suggested Citation

  • Gruber, Harald & Verboven, Frank, 2000. "The Evolution of Markets Under Entry and Standards Regulation - The Case of Global Mobile Telecommunications," CEPR Discussion Papers 2440, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:2440
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    References listed on IDEAS

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    More about this item

    Keywords

    Capacity constraints; Consumer switching costs; Entry regulation; Mobile telecommunications; Network externalities; Pre-emption; Standards and competing systems; Technology diffusion;
    All these keywords.

    JEL classification:

    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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