Diffusion of new technology generations in mobile communications

Abstract

The study identifies factors that affect the diffusion of new generations of mobile telecommunications technologies. Per capita income, urbanisation and Internet/broadband penetration, as well as regulation, positively affect diffusion across all generations of mobile technologies. However, there are also several remarkable differences in diffusion patterns over generations. Diffusion of first generation technologies boosts the adoption process of second generation networks, but second generation adoption negatively affects adoption of third generation technologies. Second generation technologies are unaffected by the spread of third generation technologies. Competition between firms has been found to be the key determinant of the diffusion speed across all generations, but there are indications that the effect is dissipating in the transition from second to third generation. Second generation markets show a switch in the influence of standards competition, with a positive effect on diffusion in the early phase and a negative effect later on.