Estimating Network Effects in Chinese Mobile Telecommunications

A model is proposed to prove the existence of network effects in Chinese mobile telecommunications market, along with the empirical investigation of the model. Futhermore, network effects in Chinese mobile telecommunications are estimated with a dynamic model. The structural parameters are identified from regression coefficients and the results are analyzed and compared with other literature. Data and estimation issues are also discussed. Conclusions are drawn that network effects are significant in Chinese mobile telecommunication market, and that ignoring network effects leads to bad policy making