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Market Structure, Regulation and the Speed of Mobile Network Penetration

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  • Yan Li

    (Centre for Competition Policy and Norwich Business School, University of East Anglia)

  • Bruce Lyons

    (Centre for Competition Policy and School of Economics, University of East Anglia)

Abstract

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 sixteen 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 the history of market structures matters and five firms maximise the speed of consumer uptake. The market structure effect does not appear to work exclusively through the level of prices. Digital technology, standardisation, privatization and independent regulation are also important positive factors, and we identify the speed and dimensions of catch-up.

Suggested Citation

  • Yan Li & Bruce Lyons, 2012. "Market Structure, Regulation and the Speed of Mobile Network Penetration," Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) 2012-03, Centre for Competition Policy, University of East Anglia, Norwich, UK..
    • Handle: RePEc:uea:ueaccp:2012_03
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    References listed on IDEAS

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    Cited by:

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    2. Agiakloglou, Christos & Polemis, Michael, 2015. "What determines demand for Telecommunications services? Evidence from the EU countries before and after liberalization," 26th European Regional ITS Conference, Madrid 2015 127119, International Telecommunications Society (ITS).
    3. Christos Genakos & Tommaso Valletti & Frank Verboven, 2018. "Evaluating market consolidation in mobile communications," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 33(93), pages 45-100.
    4. Polemis, Michael & Tselekounis, Markos, 2019. "Does deregulation drive innovation intensity? Lessons learned from the OECD telecommunications sector," MPRA Paper 92770, University Library of Munich, Germany.
    5. Mjellma Carabregu Vokshi But Dedaj Adel Ben Youssef Valentin Toçi, 2019. "Mobile phone penetration and its impact on inequality in the Western Balkan countries," Zagreb International Review of Economics and Business, Faculty of Economics and Business, University of Zagreb, vol. 22(2), pages 111-130, November.
    6. Leo Van Hove, 2016. "Measuring the value of mobile telecommunications networks," Netnomics, Springer, vol. 17(3), pages 191-222, November.
    7. Csorba, Gergely & Pápai, Zoltán, 2013. "Does one more or one less mobile opertor affect prices? A comprehensive ex-post evaluation of entries and mergers in European mobile telecommunication markets," 24th European Regional ITS Conference, Florence 2013 88503, International Telecommunications Society (ITS).
    8. Christos Agiakloglou & Michael Polemis, 2018. "The Impact of Structural Reforms on Telecommunications Performance," Journal of Industry, Competition and Trade, Springer, vol. 18(2), pages 209-222, June.
    9. Carlo Cambini & Laura Rondi, 2017. "Independent Agencies, Political Interference, And Firm Investment: Evidence From The European Union," Economic Inquiry, Western Economic Association International, vol. 55(1), pages 281-304, January.
    10. Thornton Matheson & Patrick Petit, 2021. "Taxing telecommunications in developing countries," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 28(1), pages 248-280, February.
    11. Li, Yan & Pittman, Russell, 2012. "The proposed merger of AT&T and T-Mobile: Are there unexhausted scale economies in U.S. mobile telephony?," MPRA Paper 39043, University Library of Munich, Germany.
    12. Halkos, George & Polemis, Michael, 2016. "Examining the impact of financial development on the environmental Kuznets curve hypothesis," MPRA Paper 75368, University Library of Munich, Germany.
    13. Miguel A. Fonseca & Yan Li & Hans‐Theo Normann, 2018. "Why factors facilitating collusion may not predict cartel occurrence — experimental evidence," Southern Economic Journal, John Wiley & Sons, vol. 85(1), pages 255-275, July.
    14. George E. Halkos & Michael L. Polemis, 2017. "Does Financial Development Affect Environmental Degradation? Evidence from the OECD Countries," Business Strategy and the Environment, Wiley Blackwell, vol. 26(8), pages 1162-1180, December.
    15. Arturo Basaure & Varadharajan Sridhar & Heikki Hämmäinen, 2016. "Adoption of dynamic spectrum access technologies: a system dynamics approach," Telecommunication Systems: Modelling, Analysis, Design and Management, Springer, vol. 63(2), pages 169-190, October.
    16. Yan Li & Russell Pitman, 2012. "The proposed merger of AT & T and T-mobile: Are there unexhausted scale economies in US mobile telephony?," Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) 2012-07, Centre for Competition Policy, University of East Anglia, Norwich, UK..

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    More about this item

    Keywords

    competition; market structure; privatization; independent regulator; mobile network; diffusion;
    All these keywords.

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications

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