What drives Indian mobile service market: Policies or users?

Abstract

Mobile telephony and its services have demonstrated direct impact on economic growth and social development. Offering users opportunities to keep pace with the rapid shifts in the mobile technology paradigm—from 1G to 2G, 3G, 4G, and now 5G—has also enabled businesses to earn appropriate returns on their investment. Existing literature has considered macro (policies) and micro factors (end-user level) in isolation to study diffusion, especially in the early phases of technology evolution. This study presents a framework which is a novel attempt to jointly evaluate the influence of macro and micro factors (i.e., governmental policies, and other market and user dynamics) on the diffusion of mobile telephony and its services in India. Developments in the Indian telecommunication sector (1997–2013) are used to develop the framework, and the recent developments (from latter half of year 2013–2018) are then used to validate the framework. The framework offers interesting insights on what drives Indian mobile service market showing interactions between the two sets of factors through a cause effect loop.