An econometric analysis of mobile services growth across regions of India

Abstract

Quick deployment, competition, and reduced prices have propelled the growth of mobile services in India much like in other developing and transitional countries. India has the second largest mobile subscriber base in the world, and continues to exhibit phenomenal growth. It is the objective of this study to determine the effect of different techno-economic variables on the growth of mobile services in India. The demographic, economic and market variables vary widely across regions of developing countries such as India. Though a number of cross-country studies exist, this is one of the first attempts to study the growth of mobile services across service areas of a country. We model the growth of mobile services using technology diffusion framework, incorporating other variables that impact growth. Our analysis of panel data using the model indicates that competition and network effects are the significant factors that positively affect growth of mobile services in India. The traditional factors such as income, population and fixed line penetration do not have any significant impact on the adoption of mobile services.