Diffusion of Mobile Telephony in China: Drivers and Forecasts

Analyzing mobile telephony diffusion involves identifying drivers and forecasting growth using a growth model. However, to our knowledge, no framework for model selection exists. To eliminate ad hoc model selection, this study presents a novel model-comparison method based on an analysis of mobile telephony diffusion in China, which accounts for one-fifth of global mobile telephony subscriptions. Determinants of the diffusion rate are then analyzed using the most appropriate model identified by the proposed model-comparison method in terms of minimum root-mean-square error. Empirical results identify the Gompertz model as the best model for diffusion forecasting. The three most significant determinants are low-cost mobile handsets, prepaid services, and personal handy-phone system (PHS) services. All of these determinants contribute to meeting the demand in China's low-end market. This study combines the proposed model-comparison method with estimates of determinants of diffusion rate to improve analysis and forecasting accuracy for mobile telephony diffusion. Moreover, model comparisons using data from eight representative countries (Brazil, China, France, Germany, India, Russia, the U.K., and the U.S.) provide a valuable reference for model selection for mobile telephony diffusion.

[1]  S. Sundqvist,et al.  The effects of country characteristics, cultural similarity and adoption timing on the diffusion of wireless communications , 2005 .

[2]  J. C. Fisher,et al.  A simple substitution model of technological change , 1971 .

[3]  E. Mansfield.  TECHNICAL CHANGE AND THE RATE OF IMITATION , 1961 .

[4]  Theodore S. Rappaport,et al.  Wireless Communications: Principles and Practice (2nd Edition) by , 2012 .

[5]  Lauri Frank,et al.  An analysis of the effect of the economic situation on modeling and forecasting the diffusion of wireless communications in Finland , 2004 .

[6]  P. Rouvinen,et al.  Diffusion of Digital Mobile Telephony : Are Developing Countries Different? , 2006 .

[7]  N. Meade.  The use of growth curves in forecasting market development—a review and appraisal , 1984 .

[8]  Anabela Botelho,et al.  The diffusion of cellular phones in Portugal , 2004 .

[9]  Nigel Meade,et al.  Forecasting with growth curves: An empirical comparison , 1995 .

[10]  Jaishankar Ganesh,et al.  Learning effect in multinational diffusion of consumer durables: An exploratory investigation , 1997 .

[11]  C. Shapiro,et al.  Technology Adoption in the Presence of Network Externalities , 1986, Journal of Political Economy.

[12]  Min-Kyu Lee,et al.  The diffusion of mobile telecommunications services in Korea , 2007 .

[13]  Victor R. Prybutok,et al.  How the mobile communication markets differ in China, the U.S., and Europe , 2005, CACM.

[14]  S. Singh,et al.  The diffusion of mobile phones in India , 2008 .

[15]  William H. Sackley.  Telecommunications Infrastructure and Economic Development: A Simultaneous Approach , 2002 .

[16]  D. Jain,et al.  Cross-National Analysis of Diffusion of Consumer Durable Goods in Pacific Rim Countries , 1991 .

[17]  Per Lekvall,et al.  A STUDY OF SOME ASSUMPTIONS UNDERLYING INNOVATION DIFFUSION , 1973 .

[18]  Qing Yang,et al.  Xiaolingtong versus 3G in China: Which will be the winner? , 2006 .

[19]  P. Geroski.  Models of technology diffusion , 2000 .

[20]  K. Ramamurthy,et al.  Internet messaging: An examination of the impact of attitudinal, normative, and control belief systems , 2008, Inf. Manag..

[21]  N. Meade,et al.  Modelling and forecasting the diffusion of innovation – A 25-year review , 2006 .

[22]  Michelle Wye Leng Fong.  The Mobile Phone Telecommunications Service Sector in China , 2007 .

[23]  Robert A. Peterson,et al.  Models for innovation diffusion , 1985 .

[24]  Christos Michalakelis,et al.  Diffusion models of mobile telephony in Greece , 2008 .

[25]  K. Ramamurthy,et al.  Determinants and outcomes of electronic data interchange diffusion , 1995 .

[26]  Frank Verboven,et al.  The Diffusion of Mobile Telecommunications Services in the European Union , 1999 .

[27]  Frank Verboven,et al.  The evolution of markets under entry and standards regulation — the case of global mobile telecommunications , 2001 .

[28]  Ho Kim,et al.  INNOVATION DIFFUSION OF TELECOMMUNICATIONS: GENERAL PATTERNS, DIFFUSION CLUSTERS AND DIFFERENCES BY TECHNOLOGICAL ATTRIBUTE , 2004 .

[29]  Shanthi Gopalakrishnan,et al.  A multilevel analysis of factors influencing the adoption of Internet Banking , 2003, IEEE Trans. Engineering Management.

[30]  Robert S. Friedman,et al.  Principle Concepts of Technology and Innovation Management: Critical Research Models , 2008 .

[31]  Joseph P. Martino,et al.  Technological forecasting for decision making , 1983 .

[32]  Nigel Meade,et al.  Forecasting the Diffusion of Innovations: Implications for Time-Series Extrapolation , 2001 .

[33]  Natalia Dobrovolskaya,et al.  Development of Russian mobile communications , 2004 .

[34]  Atish P. Sinha,et al.  An empirical investigation of the key determinants of data warehouse adoption , 2008, Decis. Support Syst..

[35]  Theodore S. Rappaport,et al.  Wireless communications - principles and practice , 1996 .

[36]  Otto Toivanen,et al.  Intergenerational effects in the diffusion of new technology: the case of mobile phones , 2004 .

[37]  C. Shapiro,et al.  Network Externalities, Competition, and Compatibility , 1985 .

[38]  E. Rogers,et al.  Diffusion of Innovations , 1964 .

[39]  Shanthi Gopalakrishnan,et al.  The impact of organizational context on innovation adoption in commercial banks , 2000, IEEE Trans. Engineering Management.

[40]  Show-Ling Jang,et al.  The pattern and externality effect of diffusion of mobile telecommunications: the case of the OECD and Taiwan , 2005, Inf. Econ. Policy.

[41]  Z. Griliches.  HYBRID CORN: AN EXPLORATION IN THE ECONOMIC OF TECHNOLOGICAL CHANGE , 1957 .

[42]  Sunanda Sangwan,et al.  Diffusion of Mobile Terminals in China , 2005 .

[43]  Frank M. Bass,et al.  A New Product Growth for Model Consumer Durables , 2004, Manag. Sci..

[44]  Myeong-Ho Lee,et al.  An econometric analysis of the demand for access to mobile telephone networks , 1999 .

[45]  Varun Grover,et al.  Information technology innovations: general diffusion patterns and its relationships to innovation characteristics , 2002, IEEE Trans. Engineering Management.

[46]  George Boretos,et al.  The future of the mobile phone business , 2007 .

[47]  Atish P. Sinha,et al.  Data Warehousing Process Maturity: An Exploratory Study of Factors Influencing User Perceptions , 2006, IEEE Transactions on Engineering Management.