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Usage and Diffusion of Cellular Telephony, 1998-2004

Authors: Grajek, Michał - Wissenschaftszentrum Berlin (WZB) and Humboldt University
Kretschmer, Tobias - University of Munich and LSE
Keywords: Cellular telephony, diffusion, usage intensity, network effects, consumer heterogeneity, fixed-mobile substitutability
Issue Date: 2006
Series/Report no.: NET Institute Working Paper;06-21
Abstract: In this paper, we study the dynamics of usage intensity of second-generation cellular telephony over the diffusion curve. We address two specific questions: First, does information about usage intensity over time allow us to draw conclusions about the underlying drivers of technology diffusion? Second, what effect does the existence and penetration of previous generations and other networks in the same generation on network usage intensity? Using an operator-level panel covering 41 countries with quarterly data over 6 years, we find that heterogeneity among adopters dominates network effects and that different technological generations are complements in terms of usage, but substitutes in terms of subscription.
Appears in Collections:NET Institute Working Papers Series

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