Network Externalities and Critical Mass in the Mobile Telephone Network: a Panel Data Estimation

This paper develops a simple demand model with network externalities which allow us to identify the shape of the network externalities function in the mobile telephone market and to estimate the critical mass. If the mobile telephone network exhibits positive network externalities, we expect that the demand curve is not downward sloping everywhere but it has an increasing part, the critical mass of the installed base of subscribers. Once the critical mass is reached, the growth of the network is self-sustaining. We use a panel data of the 30 OEDC Countries from 1989 to 2006 for estimating the relationship between price of 3-minute cellular call and the installed base of subscribers; we find strong network externalities effects in mobile telephone market which drive the demand curve for this network good to be an inverted U function. Moreover, given that the concavity of the demand curve depends on the extent of network externalities, the idea is to identify some variables which could affect the intensity of network effects in the mobile telephone market, because the more concave the demand curve is, sooner the critical mass is reached for any price. This may have important implications for producers in terms of initial investment and marketing strategies which they have to do to attain the critical mass.Network Externalities, Mobile Telecommunication, Critical Mass

Internet economics and policy: An Australian perspective

Publicly available information indicates that the demand and supply of Internet and Internet-related services are continuing to expand at a rapid pace. Since 1997 the number of Internet service providers (facilities-based and resellers) has increased by nearly 40 per cent; the number of points-of-presence per Internet service provider has increased by five times; the number of hosts connected to the Internet has more than quadrupled; and Internet traffic has increased from six to 10 times. The emergence of electronic commerce (e-commerce), driven by this rapid adoption of Internet services and continual technological innovation, is likely to have profound economic and social impacts on Australian society. This paper provides a detailed analysis of the impact of the Internet and e-commerce, ranging from the changes in the market structure of the telecommunications industry, its role in changing the organisation of traditional markets, the emergence of new markets, and the structural shifts to employment, productivity and trade. The paper also analyses contemporary Australian regulatory responses. IIe-commerce; internet economics

Internet network externalities

Abstract: A driving force behind the emergence of the ‘new’ or information economy is the growth of the internet network capacity. A fundamental problem in mapping this dynamic is the lack of an acceptable theoretical framework through which to direct empirical investigations. Most of the models in the literature on network externalities have been developed in a static framework, with the externalities viewed as instantaneous or self-fulfilling. The model specified here builds on the received theory from several sources to extend these features and develops a dynamic model that is both capable of econometric estimation and which provides as an output a direct measure of the network effect. Accordingly, the main goal of this paper is to find the magnitude of the external effect on internet network growth. In addition, this paper illustrates the ability of the panel data to generate estimates of structural parameters capable of explaining internet host growth.Information; network externalities; internet; growth

Estimation of network externalities and critical mass in the mobile telephone market: a panel data analysis of the OECD countries

Network Externalities, Mobile Telecommunication, Critical Mass

The Application of Bass Diffusion Model in Forecasting Telecommunication Services Users in Military Assistance to Civilian Authorities

This paper analyses the application of Bass’s diffusion model in forecasting the number of telecommunication services users in the event of natural disasters. Citizens’ behaviour has been modelled in the case of an emergency situation caused by an earthquake with high magnitude. We analysed the area of an administrative district in the south-west part of the Republic of Serbia which includes two cities and three municipalities. To control the consequences of natural disasters, a unit of the Army of Serbia with the required number of radio transceivers for establishing communication between the vulnerable population and rescuers with command staff at the observed territory has been dimensioned. Special emphasis is given to the provision of telecommunication support in the military assistance in a relief operation with civil authorities.Defence Science Journal, Vol. 65, No. 2, March 2015, pp.144-149, DOI:http://dx.doi.org/10.14429/dsj.65.602

Industrial R&D in Italy: What are new dynamics of exploitation and exploration?

This paper aims at exploring the dynamics of industrial R&D activities in large companies. Through the use of four case studies of the largest R&D centers of Italian firms operating in different industrial sectors (telecommunications, automotive, rubber and plastics, and semiconductors), we try and compare the different approaches that private R&D centers have chosen in the recent past, to face the challenges of growing complexity in their research areas and increasing constraints in budgets devoted to R&D activities. The difficulties Italian companies face in the management of their R&D investments have to do with the specificities of a fairly weak national innovation system as well as with challenges that are common to other national and industrial contexts.

Prediction of Customers Churn in Telecommunication Industry

In the developed world, mobile markets have reached saturation on subscriber penetration and connections growth. The challenge for operators has evolved from attracting new customers to retaining existing ones. Various components have an impact on churn. Therefore, it is very important to understand the behaviour of the customers, encourage them in spending more and then predicting the future by preventing their attrition. As the industry is evolving, the biggest challenge for operators is to engage with consumers and retain their loyalty by delivering more competitive and innovative value-added services. While understanding consumer needs remains essential to improve customer retention, other emerging tariffs and services are likely to carry a long-term impact on churn (including national, international and roaming bundles tariffs and mobile services). The churn might be voluntary in cases they want to leave the network they actually are using, or involuntary churn in case of unpaid bills. The methodology used to do the right evaluations in order to achieve strong results in this field is very large and varied. The scope of this thesis is to identify and analyse different appropriate models that can help the data analysts to find the churners in Telecommunication industry. In this thesis we are going to discuss on two important topics in telecommunication markets and their respective predictive models, which tend to understand the customer behaviour towards different competitors: market share in telecommunication industry and customer churn