The Impact Of Competition On Mobile Penetration In Sub-saharan Africa

Relying inainly on a recently published data of the Internat ional TelecommunicationrnUnion (ITU), World Telecommunications/leT Indicators (2008) and on a global databasernof mobile market information-Wireless Intelligence, we investigate the impact ofrncompetition on mobile penetration in 35 Sub Saharan African countries for the periodrn2000-2006. This study examines not only the impact of introduction of competition butrnalso the role of intensity of competition on mobile penetration in the region. To this effect,rnwe use different equations with different measures of competition that reflect either thernintroduction or intensity of competition on the sector. Thereafter, controlling variousrnsector characteristics and macro economic indicators, we apply panel data regressionrnanalysis with fixed effects. Besides, we test potential endogeneity problems and usernappropriate estimation technique as necessary. For the most part, the results of this studyrncome out consistent with the existing literature. That is, estimation results confilm thatrnintroduction of competition in the mobile market is strongly and positively associatedrnwith mobile penetration. Furthermore, the results of this study indicate that promotingrneffective competition plays a significant role in increasing mobile penetration.

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