Battle of the Internet Channels: How Does Mobile and Fixed-Line Quality Drive Internet Use?

Abstract

This article studies whether and how mobile Internet networks compete with traditional fixed-line Internet networks by examining the how the quality of local fixed-line Internet service influences mobile Internet adoption and use. An empirical analysis shows that local fixed-line Internet speed is negatively related to mobile Internet adoption and use; if the local fixed-line connection is insufficient, consumers tend to go online using their mobile phones. Further, better local mobile Internet coverage increases the likelihood of adopting and using the mobile Internet. Neither fixed-line nor mobile Internet speed has significant impacts on mobile offline services, such as taking photos or videos. In some circumstances, competition between the two channels is stronger, such as among younger consumers and those who live in areas with lower fixed-line Internet speeds. The authors discuss the implications of these findings for policy makers, consumers, and mobile service providers.