Diffusion of mobile telephony in China: Driving forces and forecasting

Analyzing the diffusion of mobile telephony initially involves estimating the driving forces and forecasting for diffusion based on a growth model. However, to our knowledge, no framework for model selection has been developed. To mitigate the randomness in model selection, this study presents a model comparison to analyze the diffusion of mobile telephony in China, which has the most mobile telephone subscribers worldwide, and which has not been analyzed empirically. Empirical results based on data for mobile telephone subscribers in China from 1986–2007 indicate that the Gompertz model is the most appropriate model for these data. The four significant factors affecting the diffusion rate are fixed-line telephony, the low cost of mobile handsets, ‘pay-as-you-talk’ (pre-payment) service and a personal handy-phone system (PHS) service. Moreover, the forecasting accuracy of penetration of mobile telephony in China in 2008 was up to 95%. This study combines the model comparison method into diffusion studies of mobile telephony to reduce the randomness in model selection, and to increase the accuracy of analysis and forecasting.

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