An analysis of the effect of the economic situation on modeling and forecasting the diffusion of wireless communications in Finland

In this paper, the diffusion of wireless communications in Finland is studied. The objectives are to find factors which have affected the diffusion process and to forecast the diffusion of wireless communications in Finland. The diffusion process is based on the epidemic diffusion theory. The data consists of annual wireless subscribers of networks based on Nordic Mobile Telephone (NMT) and Global System for Mobile Communications (GSM) standards in 1981-1998. The data is fitted into the logistic model by means of nonlinear least squares after writing two parameters of the logistic model as functions of certain variables. The results show that the economic situation has affected the relative growth rate, and that the wireless network coverage has affected the number of potential adopters. By extrapolating the logistic model, a forecast with a confidence interval of wireless communications subscriber rates in Finland is made. The forecast shows that the final penetration rate will be some 91.7% in 2009. The model predicts the actual figures of year 1999 very accurately. Finally the time, derivatives of the diffusion process are analyzed; they clarify the effect of economic situation on the diffusion. (C) 2002 Elsevier Inc. All rights reserved.