Title
Network effects in mobile telecommunications markets: A comparative analysis of consumers' preferences in five Latin American countries
Date Issued
01 June 2020
Access level
metadata only access
Resource Type
journal article
Author(s)
Publisher(s)
Elsevier Ltd
Abstract
It has been shown that the presence of demand-side externalities can induce the market to benefit the largest firms in terms of market share, usually named as network effect by the theoretical literature. On the one hand, macro-level approach in the empirical literature of network effects commonly use the assumption that a network's overall size matters more to consumers' decisions (global network effects). On the other hand, micro-level studies have suggested that social networks are more relevant to consumers' choices than the overall network size (local network effects). Based on microdata from five Latin American countries, we compare the choice of a particular operator over choosing the largest operator by individual consumers. Our research shows that country-level network size is one among a set factors that determine consumers' choices of mobile operators, once individual and operators' country presence heterogeneity are considered. We find that consumers' local network decisions are important for the choice of operator in the majority of cases considered, and that this result is conditional on the chosen operator's market share. Furthermore, network characteristics and consumer preferences, such as coverage, tariffs, and network importance also affect the choice of mobile network for the Latin American context.
Volume
44
Issue
5
Language
English
OCDE Knowledge area
Telecomunicaciones
Subjects
Scopus EID
2-s2.0-85083428091
Source
Telecommunications Policy
ISSN of the container
03085961
Sponsor(s)
This work was carried out thanks to the grant awarded by the International Development Research Centre ( IDRC ), Ottawa, Canada. The opinions expressed here do not necessarily represent those of IDRC or its Board of Governors. All errors are our own.
Sources of information:
Directorio de Producción Científica
Scopus