A Framework for Understanding Mobile Telecommunications Market Innovation: A Case of China

ABSTRACT Most of the present research on the dynamics of mobile telecommunications market focuses on either technology innovation or service adoption. Drawing upon actor-network theory, we set up a framework that incorporates the two perspectives. We further apply this framework to dissect a case of China Telecom. The case study demonstrates that our model enables a systematic description on the mutual influence of infrastructure innovation and innovation adoption that moves beyond unilateral accounts. Moreover, our framework captures the interplay between mobile telecommunications market and its social network formed by the interrelated users, service providers and other related institutions. It is a useful too for the researchers to grasp a systematic understanding of mobile telecommunications development in China in particular, and in other countries in general. Keywords: Actor-network theory; Adoption; China; Infrastructure; Innovation; Mobile telecommunications market 1. Introduction In recent decades we have witnessed dramatic changes in mobile telecommunications technologies and services. This phenomnon raises wide research interests as the general availability and widespread adoption of advanced telecommunications technologies are linked to the economic potential of nations [Fransman, 2002]. However, research to date has largely focused on Western countries. This article analyzes mobile telecommunications market innovation in China, which has been relatively sidelined in this research term. China is the largest mobile telecommunications market in the world, which grows at one of the highest rates in the global scale. Constrained by its unique social environment, China's mobile telecommunications market has innovated in a particular way [Zhu, 2005]. For example, as we will read later in our case study in this article, in other countries the markets have changed from the second generation (2G) through the 2.5 generation (2.5G) to the third generation (3G); but in China, waiting for its indigenous 3G technologies to mature hence be used, the government has not issued the 3G licenses yet. Interestingly, we instead have seen the success of personal handyphone system (PHS), a cordless telephony technology generally treated as an extension of the fixed network. It is of practical interest to know the characteristics of mobile telecommunications market innovation in China and to disclose the driving forces to it. Indeed, this article does not limit its focus to the description of the Chinese experience. Instead, we have a more important purpose that is to make theoretical contribution. Specifically, we attempt to propose a framework that may help us understanding mobile telecommunications market innovation in China in particular, and in other countries in general. Normally, researchers investigate the dynamics of mobile telecommunications market from two distinct perspectives, either technology innovation or service adoption [Okazaki, 2005]. As an example of innovation studies, Edquist [2003] reports the results of a collection of papers that draw upon Systems of Innovation Theory to analyze the innovation of Internet and mobile technologies. Equally, there has also been considerable research carried out to explain the user adoption of mobile services [see e.g. Bauer, Barnes, Reichardt and Neumann, 2005; Pavlou and Chai, 2002; Pedersen, 2005], for which Diffusion of Innovation Theory [Rogers, 1995], and Theory of Reasoned Action [Ajzen, 1980] as well as its extensions like Technology Acceptance Model [Davis, 1989] and most recently the Unified Theory of Acceptance and Use of Technology (UTAUT) [Venkatesh, Morris, Davis and Davis, 2003], serve as major analytical tools. We argue that infrastructure innovation or service adoption perspectives alone can only partly explain the innovation in mobile telecommunications market [Okazaki, 2005]. Drawing upon actor-network theory, in this article we combine the two perspectives into one framework to pursue a holistic understanding of this phenomenon [Callon, 1991]. …