Is a Pots Dispensable? Substitution Effects between Mobile and Fixed Telephones in Korea

26 Pages Posted: 19 May 2000

See all articles by Nakil Sung

Nakil Sung

University of Seoul - Department of Economics

Chang-Gum Kim

Korea Telecom - Management Research Laboratory

Yong-Hun Lee

Korea Telecom - Management Research Laboratory

Date Written: April 2000

Abstract

As the stock of mobile telephones surpassed fixed telephones, thereafter reaching a density of more than 50 per 100 inhabitants in Korea, the potential for mobile phones to become a substitute for, and directly compete with fixed phones, has become evident. The aim of this paper is to examine the impact of rapid growth in mobile telephones on the access demand for traditional fixed telephones. The study shows that a 1% increase in the number of mobile telephones results in a reduction of 0.1-0.2% in new fixed connections and a 0.1-0.2% increase in fixed disconnections. The empirical analysis is carried out with Korean regional panel data for the period 1991-1998. The study is relevant to several important public policy issues.

JEL Classification: D12, L96

Suggested Citation

Sung, Nakil and Kim, Chang-Gum and Lee, Yong-Hun, Is a Pots Dispensable? Substitution Effects between Mobile and Fixed Telephones in Korea (April 2000). Available at SSRN: https://ssrn.com/abstract=222288 or http://dx.doi.org/10.2139/ssrn.222288

Nakil Sung (Contact Author)

University of Seoul - Department of Economics ( email )

90 Cheonnong-dong, Dongdaemun-gu
Seoul, 130-743
Korea
82-2-2210-2180 (Phone)
82-2-2210-5232 (Fax)

Chang-Gum Kim

Korea Telecom - Management Research Laboratory ( email )

206 Jungja-dong
Bundang
Sungnam Kyunggi, 463-010
Korea

Yong-Hun Lee

Korea Telecom - Management Research Laboratory ( email )

206 Jungja-dong
Bundang
Sungnam Kyunggi, 463-010
Korea

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