Competition and Innovation: The Diffusion of Mobile Telecommunications in Central and Eastern Europe

Abstract

The paper unravels the determinants of the diffusion of mobile telecommunications in Central and Eastern Europe. About 20% of the population will adopt mobile telecommunications. In countries that have adopted mobile telecommunications late, the diffusion speed is faster, implying a pattern of convergence in the diffusion levels. The speed of diffusion increases with the number of firms. Simultaneous entry is more effective in accelerating the diffusion speed than is sequential entry. Diffusion is quicker the larger the fixed telecommunications penetration rate and the longer the waiting list. Policy recommendations derived from these results permit to further qualify popular views on the sector.

JEL Classification: L96, O33, P23