Diffusion of Mobile Telephony Services in India

Abstract

Various factors have led to the emergence of India as the second largest mobile telephony market in the world. In terms of growth velocity, India’s mobile telephony diffusion exhibits three distinct growth phases viz: exponential growth phase, linear high growth phase and linear slow growth phase. This paper describes these phases for growth of mobile telephony in India during 1996-2019 and further attempts to model the diffusion using standard epidemic models like Gompertz, Logistics and Bass Models to examine if they provide a good fit. Assuming that there shall not be any unusually high level of change in the causal variables- saturation tele-density has also been predicted using these models. As a part of a larger study on pricing imperatives of evolving mobile telephony in India, this study strives to add and update the available literature on mobile telephony diffusion in India. It also evaluates the impact of some of the key determinants of mobile diffusion globally on Indian growth story viz: digital divide (between rural and urban areas), per capita Gross Domestic Product, technological evolution; and substitutes like fixed telephones.