The IUP Journal of Telecommunications
Estimation of Mobile Telecommunication Demand Using OLS Method with Qualitative Information to Test Economic Crashing Time

Article Details
Pub. Date : May, 2020
Product Name : The IUP Journal of Telecommunications
Product Type : Article
Product Code : IJTC40520
Author Name : Raufu Oluwatoyin Raheem
Availability : YES
Subject/Domain : Engineering
Download Format : PDF Format
No. of Pages : 11

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Abstract

Many countries have been facing the problem of how to represent the economic downtime, economic crashing or economic recession in order to make appropriate decision or policy intervention. For this purpose, the paper estimates mobile telecommunication demand for 10 years of 27 countries using Ordinary Least-Square (OLS) method with qualitative information as dummy variable. The dummy variable examines the economic crashing time in South Korea during 1997. The paper uses price of mobile (mobile cellular monthly subscription) in telecommunication industry, income of consumers and investment as three independent variables, while the number of mobile cellular telephone subscribers per 100 inhabitants is used as dependent variable. The results indicate that the higher the income, the higher would be the demand for mobile cellular telephone subscribers per 100 inhabitants and investment has no effect as t-statistic is less than 2. In the same manner, the dummy variable has no statistical significance at 5% level on the demand for mobile telecommunication during economic crashes. This implies that the effect of economic crash or economic downtime in South Korea in 1997 is statistically insignificant in relation to demand for mobile telecommunication.


Description

Many countries have been facing the problem of how to represent the economic downtime, economic crashing or economic recession in order to make appropriate decision or policy intervention. Today, mobile telephones are seen as a "basic necessity" and should enjoy persistent strong demand throughout an economic downturn, a United Nations agency said in its report 2010. "With or without a recession", millions of people in India, China, Nigeria and other emerging markets seek out mobile phones, according to the International Telecommunication Union (ITU) (MacInnis, 2009). Cellular networks and telecommunications had brought tremendous change in the way businesses are conducted (Al-Debei et al., 2008). Increasingly cost-conscious households in Europe and North America are also expected to keep up their mobile use, and many will drop their fixed-line telephones as a way to save money, the ITU said in a report released for the Mobile World Congress trade show in Barcelona. "Once a user gets a mobile phone, it is difficult to give up, and in many countries mobile phones have become a necessity,"its Confronting the Crisis report found. "Many communication technologies including mobile telephony and broadband still offer huge growth potential with or without a recession", it said. "With its strong growth potential, mobile telephony can help facilitate economic recovery". There were four billion mobile subscriptions worldwide at the end of 2008, after an average of 24% annual growth since 2000 (MacInnis, 2009).


Keywords

Ordinary Least-Square (OLS), Economic crashing, Qualitative information

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