PANS in the Swedish cellular industry: How bright will it be?
Paper i proceeding, 2010
As an aspect of Information and Communication Technology (ICT), the existence of the cellular industry is closely related to the achievement of economic development, especially due to the effect of network externalities and demand-side economics of scale. However, the adoption and buyer diffusion process from the demand side will depend on the availability of cellular content and services based on technological innovation and development on the supply side. Furthermore, there is a need to seek other sources of revenue by identifying new services, given the fact that the existing penetration rate in Sweden has been very high and, more importantly, the growth of revenue from traditional services has been declining considerably during the last couple of years. This study estimates the market demand especially in the services which are categorized as Pretty Amazing New Services (PANS) in the Swedish cellular industry – e.g. mobile games, mobile TV, mobile Internet, mobile news, mobile video and mobile payments. The source of data is the annual individual survey conducted during 2002-2009 by Post-och telestyrelsen (PTS), the Swedish post and telecom agency. The survey comprises about 1500 individuals per year around Sweden. The demand estimation applies a probit model which enables us to measure the likelihood ratio of demand for the services given different characteristics of respondents in terms of income, age, education, sex and geographical area. The results reveal that most of the new services will be more attractive for the profile of a customer who is identified as a male, living in a small city and having a middle/upper educational degree and income. It is also found that customers who travel regularly abroad are a potential market segment.