Getting connected: competition and diffusion in African mobile telecommunications markets

Frew Amare Gebreab

No 2863, Policy Research Working Paper Series from The World Bank

Abstract: 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.

Keywords: Trade Finance and Investment; Economic Theory&Research; Environmental Economics&Policies; ICT Policy and Strategies; Health Economics&Finance; Economic Theory&Research; ICT Policy and Strategies; Environmental Economics&Policies; Governance Indicators; Health Economics&Finance (search for similar items in EconPapers)
Date: 2002-06-30
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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