Working Paper: CEPR ID: DP2598
Authors: Pedro Pita Barros; Nuno Cadima
Abstract: There is currently little knowledge on the consequences of diffusion of cellular technology on the incumbent fixed-link telephony service. We address this issue by estimation of diffusion curves for both technologies, allowing for potential cross-effects, using data from a small European economy. Our main findings are a negative effect of the mobile phone diffusion on the fixed-link telephony penetration rate. The effect is, roughly, a ten percent decrease in the fixed-link penetration rate (in comparison with the absence of mobile phones). No effect on the reverse direction seems to exist. Mobile phone market growth seems to be determined essentially by technological advances.
Keywords: mobile phone diffusion; telecommunications
JEL Codes: L96
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Mobile phone diffusion (L96) | Fixedlink penetration (Y50) |
| Mobile phone penetration increases (L96) | Number of fixedlink subscribers (G12) |
| Fixedlink growth (O41) | Mobile phone penetration (L96) |