Network Economics in Telecom

Varadharajan Sridhar

in The Telecom Revolution in India

Published in print December 2011 | ISBN: 9780198075530
Published online September 2012 | e-ISBN: 9780199081042 | DOI:
Network Economics in Telecom

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This chapter investigates the characteristics of the telecom industry. The applicability of network externalities is very much evident in mobile services in India. The growth of Internet connectivity, and the openness of the Internet, is driven by an inexorable economic logic. The four main elements in the diffusion process of telecom services are innovation, communication channels, time, and the social system. There are typically two models which are used to model the growth of telecommunication and Internet services and are explained: logistic model and Gompertz model. All types of telecom services exhibit network externality characteristics and their adoption pattern conforms to the S-curve model. However, the different services differ in the critical issues that govern their growth. It concludes that most of the diffusion models do not take into consideration environment effects including regulations. Finally, an overview of the chapters included in this book is presented.

Keywords: telecom; network economics; logistic model; Gompertz model; network externalities; India; telecommunication; Internet services; regulations

Chapter.  6860 words.  Illustrated.

Subjects: Economic Development and Growth

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