The Diffusion of Mobile Telecommunications Services in the European Union

The paper investigates into the determinants of the diffusion of mobile telecommunications services in the European Union. Capacity increase, due to the switch from the analogue to the digital technology during the early nineties, has had a significant and positive impact on the diffusion. The impact of introducing competition was also significant, during both the analogue and the digital period, though the effect was proportionately smaller. Finally, we find that countries which granted first licenses at later points in time, show a significant catching-up effect, though international convergence may be expected only by the year 2006. The empirical results remain robust when other possible determinants of diffusion are included, such as the size of the fixed network and GDP per capita