Getting Connected: Competition and Diffusion in African Mobile Telecommunications Markets
The author studies the determinants of the diffusion of mobile telecommunications in Africa in a fixed effects model. He uses data from 1987-2000 on 41 African countries that have adopted cellular telecommunications technologies. He finds that comp...
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| Language: | English en_US |
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World Bank, Washington, D.C.
2013
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| Online Access: | http://documents.worldbank.org/curated/en/2002/06/1953634/getting-connected-competition-diffusion-african-mobile-telecommunications-markets http://hdl.handle.net/10986/14261 |
| Summary: | The author studies the determinants of
the diffusion of mobile telecommunications in Africa in a
fixed effects model. He uses data from 1987-2000 on 41
African countries that have adopted cellular
telecommunications technologies. He finds that competition
is the driving force behind the mobile telecommunications
explosion in Africa. Duopoly and triopoly markets grow
significantly faster than monopoly markets, although growth
does not appear to differ between the first two markets.
Evidence of preemptive behavior is found in competitive
sequential entries into the market, but the major effect of
competition on diffusion occurs after the actual year of
entry. The introduction of digital technology has a positive
and significant effect on the diffusion of mobile phones.
The presence of an incumbent-owned cellular operator has a
negative effect on the diffusion of mobiles, suggesting an
abuse of a dominant position by the incumbent fixed-line
operator. However, privatization of the incumbent fixed-line
cellular operator accelerates mobile growth and mitigates
that negative effect. |
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