A nonparametric method of estimating the demand for mobile telephone networks - An application to the Korean mobile telephone market

This paper estimates the demand for subscribing to mobile telephone networks in Korea based on survey data. The goal of this paper is to provide answers to two important questions: (1)What are the characteristics of mobile subscribers, and will these characteristics change in the future? and (2) Will the mobile penetration rate in Korea increase substantially? The estimation strategy is based on a nonparametric reduced-form analysis which aims at describing how individuals' mobile subscription decisions and intentions to subscribe are related to their characteristics. It is found that age, sex and education are all important determinants of mobile subscription and intentions to subscribe decisions. The intended subscription rate is generally higher among younger people, men, and those who have: received some post high-school education. It is also found that the intended subscription rate is significantly higher than the current subscription rate, which may indicate a future growth in the mobile telephone market. (C) 2001 Elsevier Science B.V. All rights reserved.