Examining the influencing factors and the most efficient point of broadband and mobile adoption in China

Abstract

This paper examines several key factors affecting the adoption rate of broadband and mobile in the 31 provinces of China by employing the Stochastic Frontier Analysis (SFA) model. It was found that disposable income, penetration rate of fixed phones, number of Internet users, educational attainment and geo-graphic location were the most important factors in the adoption of broadband, and the results also showed that fixed phone penetration, network capacity, occupation structure, disposable income, and geographic location were the important factors that may influence the mobile phone adoption rate in each province. The empirical results presented the relative market potential of each province by calculating the most efficient point of broadband and mobile phone adoption. In particular, we found that the broadband market potential is much greater in the more developed areas of China where the actual adoption rate is high, such as municipalities and the southeast coast region. In addition, the mobile market potentials are still big not only in the rich Yangtze River delta regions like Shanghai, Zhejiang and Jiangsu but also in the rural central and western areas.