Three Private Firms and an Independent Regulator are Sufficient for Rapid Mobile Network

ESRC Centre for Competition Policy Working Paper No. 11-1

31 Pages Posted: 8 Jul 2011

See all articles by Bruce Lyons

Bruce Lyons

University of East Anglia

Yan Li

affiliation not provided to SSRN

Date Written: 2011

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 a non-monotonic effect of market structure, with three firms maximising consumer uptake. Privatization and independent regulation are also important positive factors. Further results show that the market structure effect works only partially through the level of prices.

Keywords: competition, market structure, privatization, independent regulator, mobile network, diffusion

JEL Classification: L13, L51, L96

Suggested Citation

Lyons, Bruce and Li, Yan, Three Private Firms and an Independent Regulator are Sufficient for Rapid Mobile Network (2011). ESRC Centre for Competition Policy Working Paper No. 11-1, Available at SSRN: https://ssrn.com/abstract=1881712 or http://dx.doi.org/10.2139/ssrn.1881712

Bruce Lyons (Contact Author)

University of East Anglia ( email )

Norwich Research Park
Norwich, Norfolk NR4 7TJ
United Kingdom

Yan Li

affiliation not provided to SSRN

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