First mover advantages in mobile telecommunications: Evidence from OECD countries

Arbeitspapier

We explore the existence of first mover advantages in mobile telecommunications markets. Building on a data set comprising monthly penetration rates, market concentration, number of active operators, and market shares of 90 followers from 33 OECD countries, we estimate a dynamic growth model. Our analysis delivers five key results. Regarding a follower's longrun market share, we observe that (1) the penetration rate at the time of market entry exerts an inverted u-shaped effect, suggesting the existence of an optimal time for issuing additional licenses for mobile network operation; (2) the concentration rate at market entry exerts a positive effect, implying that it is easier for followers to enter a more concentrated market; (3) both the number of active operators at market entry and the number of currently active operators have a negative impact. Furthermore, we find that a follower's rate of convergence to the long-run market share is (4) negatively influenced by the current market concentration and number of active operators; (5) negatively affected by changes in the penetration rate since market entry, which strongly indicates the presence of substantial first mover advantages for pioneering network operators.

Object Details

• ISBN: 978-3-86304-070-3
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: DICE Discussion Paper ; No. 71

Classification and Topics

• Classification: Wirtschaft ; Telecommunications ; Regulated Industries and Administrative Law ; Technological Change: Choices and Consequences; Diffusion Processes
• Subject: First mover advantages ; Asymmetric regulation ; Market share convergence ; Mobile telecommunications ; Mobilkommunikation ; Markteintritt ; Marktanteil ; Schätzung ; OECD-Staaten

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Muck, Johannes ; Heimeshoff, Ulrich
• Event: Veröffentlichung
• (who): Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE)
• (where): Düsseldorf
• (when): 2012

Further information

• Handle: http://hdl.handle.net/10419/65677
• Last update: 10.03.2025, 11:45 AM CET