Article 1
Article 1
A R T I C L E I N F O A B S T R A C T
Keywords: Recognizing the value and potential of the next generation mobile networks, major advanced
Mobile network countries, including South Korea, are developing various policies, and competitively considering
Generational transition the transition to secure next-generation mobile networks. This study aims to examine the factors
Competition framework
influencing the generational transition of mobile communication networks. In particular, this
Legal environment for media contents
Institutional factors
study focuses on how previously unknown institutional factors, including the competition
Cross-country analysis framework in the ICT market and the legal environment for media contents, affect mobile net
works’ transition to 3G and 4G. Through a comparative cross-country analysis using more than
143 countries over 18 years of data, this study showed that a well-established competition
framework in the information and communications technology (ICT) market positively affects the
generational transition from 2G to 3G and from 3G to 4G mobile networks. Further, the legal
environment for media contents also positively affects the generational transition from 3G to 4G
mobile networks. The results provide crucial insights for policymakers and industry players to
develop and implement policies and strategies for the generational transition of mobile
communication networks not only from 3G to 4G and but also from 4G to 5G.
1. Introduction
Along with the development of next-generation mobile telecommunication, the world of Information Communication Technology
(ICT) continues to progress. Since the introduction of the first-generation (1G) Advanced Mobile Phone Service (AMPS) in 1979, each
new mobile network generation has taken roughly ten years to appear. The first commercial fourth-generation [Long Term Evolution
(LTE) or 4G] mobile communication network was launched in late 2009 in Sweden and Norway (Ericsson, 2009), nine years after the
first commercial launch of the third-generation (3G) mobile service in Japan (Kamimura, 2001). Considering that the fifth generation
(5G) of mobile communication may lead to the digital transformation of individual, industry, and society (Militano et al., 2015;
Akpakwu et al., 2017), South Korea has become a leading country in 5G mobile communication by building 5G mobile communication
networks in all major cities in the first quarter of 2019 (McCurry, 2019). However, in many countries, the realization of 5G vision as
well as the deployment of the 4G mobile communication network is still progressing slower than expected, delaying so-called the
fourth industrial revolution and creating a global digital divide between nations.
* Corresponding author.
E-mail address: hiddentrees@korea.ac.kr (S. Kim).
https://doi.org/10.1016/j.tele.2021.101667
Received 27 January 2021; Received in revised form 4 June 2021; Accepted 13 June 2021
Available online 16 June 2021
0736-5853/© 2021 Elsevier Ltd. All rights reserved.
H.Y. Kwon and S. Kim Telematics and Informatics 63 (2021) 101667
The generational transition of mobile communication networks is very important because the spread of a next-generation mobile
broadband network has a positive spillover effect of improving corporate productivity or creating new business opportunities by
delivering information faster and more efficiently. Companies that make new business models or provide information using high-speed
Internet can increase productivity and contribute to economic growth by transforming business models along with the spread of new
generations of mobile broadband (Crandall et al., 2007; Qiang et al., 2009). Several empirical studies have also proven the effect of
promoting economic growth when the penetration rate of more advanced mobile communication technology increases or the mobile
network’s generational transition is achieved quickly (Thompson and Garbacz, 2011; Levendis and Lee, 2013; Minges, 2015).
In particular, the transition to 5G network does matter because 5G technology will be at the heart of the fourth industrial revo
lution, which would radically change every aspect of our lives. In comparison to previous generations, 5G will offer unprecedent levels
of connectivity in terms of higher data rates, traffic density, reliability, and user speed, lower latency, connectivity for a great number
of devices, and lower power enabling Internet of Things applications (Cave, 2018; Lemstra, 2018). 5G technology will be a powerful
tool in building Internet of Things (IoT)-based communication between devices and can be used as an infrastructure to create inter-
industry convergence (Militano et al., 2015; Akpakwu et al., 2017).
Recognizing the value and potential of the next generation mobile networks, major advanced countries, including South Korea, are
developing various policies, and competitively considering the transition to secure next-generation mobile networks.
In the meantime, more effective and efficient policies can be pursued if any critical factors influencing mobile networks’ transition
to the next generations would be revealed. Several previous studies have predicted the size of the 3G or 4G market and examined the
determinants affecting the deployment of 2G or 3G mobile networks (Bohlin et al., 2010; Lee et al., 2011; Lin and Wu, 2013; Shinohara
et al., 2014; Yates et al., 2013). However, few studies have been conducted to determine what factors affect the generational transition
of mobile networks.
To fill the gap between the call for research and previous studies, this study aims to examine the factors influencing the generational
transition of mobile communication networks. In particular, this study focuses on how previously unknown institutional factors,
including the competition framework in the ICT market and the legal environment for media contents, affect mobile networks’
transition to 3G and 4G. This study can be differentiated from previous studies by adopting a comparative cross-country analysis using
more than 143 countries over 18 years of data.
The remainder of this paper is organized as follows. Section 2 provides literature review and research hypotheses. Section 3 de
scribes methodology including the data, measurement of key variables, and empirical specification. Section 4 presents the empirical
results. Section 5 provides the discussion from the results and conclusion.
Mobile communication has gone through numerous technological advances from the initial launch of 1G in the late 1970s to that of
the powerful 4G in 2009. 1G mobile communication networks used analog transmissions for voice services. They provided roaming
functions, but the cellular network could not operate between countries. Introduced in the late 1980s, the second-generation (2G)
mobile networks used digital signals for voice transmission, and international roaming between mobile network operators became
very common. Low-bit-rate data services such as short message service (SMS), as well as existing voice services, also began to be
supported. 2G technology was divided mainly into Global System for Mobile Communications (GSM) in Europe and Code Division
Multiple Access (CDMA) in the United States. Since its speed was between 14.4 and 65 kbps, it was virtually impossible to transfer
multimedia files. While 1G and 2G were mainly designed for voice transmission, 3G service included wide-area wireless voice tele
phony, video calls, and broadband wireless data. Full-scale multimedia transmission started with 3G which offered up to 3.1 Mbps
speed. 3G technology has made additional technological advances based on Wideband CDMA (WCDMA) standard. 4G service, which
Table 1
The evolution of mobile communication network.
Generation Time-period Throughput/Speed Technology Internet Bandwidth/ Services introduced
services Carrier
Frequency
1G 1980–1990 14.4 Kbps (max) AMPS No Analog /30Khz Only voice call
Internet
2G 1990–2000 (2G). 9.5–65 kbps CDMA, GSM Narrow 25 MHz/200Khz Voice call, SMS, international roaming
2001–2004 (2.5G) band
3G 2004–2005 (3G), 3.1 Mbps(peak) IMT2000, Broad 25 MHz/5Mhz Voice data, non-voice data
2006–2010 (3.5G) 500–700 Kbps WCDMA band transmission
4G 2009-Present 100–300 Mbps (Peak) LTE, LTE-A, Ultra 100 MHz/15Mhz The fast data rate, High-quality HD
3–5 Mbps 100 Mbps WiMAX Broad visual phone, All-IP → M-VoIP →
(Wi-Fi) band VoLTE service
5G 2019-Present 20 Gbps (peak), 100 Massive MIMO, Ultra 30–300 GHz/ Ultra-reliable and low latency
times faster than 4G mm Waves, NR Broad 3–30Ghz communications, Internet of Things,
band HD multimedia streaming
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H.Y. Kwon and S. Kim Telematics and Informatics 63 (2021) 101667
started in 2010, enabled all-IP packet switching networks, mobile ultra-wideband access, and multi-carrier transmission. Based on LTE
and LTE-A (LTE Advanced) technologies, 4G made it possible to watch high-definition videos in real-time and download large-capacity
games in an instant. 5G service has up to 20 Gbps speed. In other words, it is 20 times faster than 4G. In 5G environment, users can
download a movie in a few seconds and watch Virtual Reality or Ultra High Definition videos in real-time. Table 1 summarizes the
evolution of mobile communication network.
Considerable studies have been studied on the economic impact of ICT (Ollo-López and Aramendía-Muneta, 2012; Nordhaus,
2015), broadband network (Clarke and Wallsten, 2006; Czernich et al., 2011), and wireless telephony (Lam and Shiu, 2010; Gruber
and Koutroumpis, 2011). For the past two decades, both theoretical and empirical studies confirm that wireline and wireless tele
phony, as well as fixed and mobile broadband, have an impact on economic growth, employment, and, in some cases, trade and
productivity.
One of the essential topics in the evolving research on the spillover effects of telecommunication network is the impacts of tele
communication penetration on the economy. Roller and Waverman (2001) indicate that the telecommunications penetration rate
generates significant aggregate economic output, and it may only become substantial once the adoption of the technology achieves
high penetration levels. Similarly, Koutroumpis (2009) investigates how broadband network penetration affects economic growth
using data collected from 22 OECD countries from 2002 to 2007 and shows that economic impact increases with penetration.
The rate of spread of mobile communication networks varies from country to country and is affected by various factors. Existing
studies indicate that economic development, education level, population density, standardization policy, competition in the tele
communication market, and infrastructure affect the spread of broadband netowrk (Lee, 2008; Sagbansua et al., 2015; Shinohara et al.,
2014; Gruber and Verboven, 2001; Yates et al., 2013; Lee et al., 2011).
Table 2 summarizes the analysis targets and significant conclusions of existing empirical studies on mobile networks’ penetration.
Most previous studies have empirically investigated the diffusion of 2G or 3G. However, they did not consider generational transitions
from 2G to 3G or from 3G to 4G. In addition, they have failed to explain other factors beyond economic development, standardization,
and market concentration. Moreover, mainly due to data limitation, most early studies performed multivariate ordinary least square
(OLS) regression analyses with data for one or several time series.
As discussed in the introduction part, major countries are actively promoting next-generation mobile communication networks to
gain economic benefits from being key to introducing the new generation (Lee and Lim, 2001). For example, in the US, the system has
been changed to allow network operators to secure investment capabilities through a decision to abolish network neutrality while
competing for leadership in the 5G market (Kang, 2017).
Accordingly, identifying determinants of the next generation network’ diffusion and implementing appropriate policies regarding
them have become important ways for governments to stimulate economic growth and social development (Cambini et al., 2012).
Furthermore, since mobile communication is widely recognized as an essential part of the next generation network, it remains a
challenge for policymakers to understand exactly why mobile network’s generational transition tends to differ across countries.
According to Rosenberg (1972), the supply side factors would play a role in diffusion and the acceptance of new technologies such
as the next generation network through the improvement of the quality from competition. Several empirical studies show that
competition is a factor in the spread of broadband network (Rouvinen, 2006; Shinohara et al., 2014; Sagbansua et al., 2015). However,
existing research is limited to 2G and 3G. Mobile communication and related ICT industries cannot expect a completely competitive
market situation due to the high sunken and fixed cost for market entrance.
Also, the allocation and use of spectrum, which is a public good, is decided by the government policy. The government grants
business licenses and determines the market structure for mobile communication by fixing the number of market entrants and their
modes of entry. The statistics show that mobile communication service is typically a market where three to four MNOs compete in most
countries (Fig. 1). There has not been much difference in the market competition level in the mobile communication industry since 3G
was introduced.1 If there is no change in market concentration since the introduction of 3G technology, can market competition still
affect the penetration of a new generation of mobile networks? Previous studies have discussed whether companies will minimize costs
or quickly adopt more efficient technologies in a competitive market so that consumers will be provided services at an affordable price
(Shinohara et al., 2014; Yates et al., 2015).
We infer that the vital factor is whether the competition can be encouraged further or not. Indeed, even if the market competition
level is not further intensified, MNOs may quickly adopt new generation of mobile networks if there is a perception that their current
market positions can be threatened at any time through competition. Therefore, each country’s unique institutional factors may
1
Allen et al. (2017) reports HHI score decreased from 2003 to 2011, but there has been little change after 2012, deduced by using 28 European
member countries’ historical data.
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H.Y. Kwon and S. Kim
Table 2
Previous empirical studies on mobile networks’ penetration.
The subject of analysis & data Methodology Key factors analyzed Major findings
Gruber and The spread of 1G and 2G in 140 Nonlinear least squares Timing of first and additional entry licenses, the total - Diffusion between countries converged slowly and
Verboven countries over the period 1981 to 1997 (logistic) number of potential adopters consumer switching costs affect the diffusion process.
(2001) - Single technological standard accelerates the diffusion of
digital technologies.
Koski and Diffusion of 2G, using 2G subscriber Nonlinear least squares Entry time dummy, service prices monthly, diffusion - Standardization accelerates 2G diffusion and penetration
Kretschmer data from 32 countries during the 1990s (logistic) (2G mobile phones per population) pricing is effective in monopolistic markets.
(2005)
Rouvinen (2006) 2G diffusion for 165 countries from Gompertz growth Difference of mobile telephony users, market size, - Standard competition hinders and market competition
1993 to 2000 model, robust OLS income, economic development promotes 2G diffusion in both developing and developed
estimation countries.
Lee (2008) The spread of 1G, 2G, and 3G in 54 Linear regression 1G, 2G, and mobile broadband subscribers per 100 - Multiple standards and income positively affect 3G mobile
countries from 2004 to 2006 analysis, one-way inhabitants, licensing policy, GDP per capita broadband penetration while 1G and 2G mobile penetration
ANOVA correlated negatively.
Bohlin et al. The spread of 2G and 3G in 177 Nonlinear least squares Total number of adopters relative to potential adopters, - Per capita income, urbanization, and Internet penetration
(2010) countries from 1991 to 2007 (logistic) number of mobile subscribers, market shares of each rates have a positive influence on diffusion.
mobile generation - First-generation technologies boosted diffusion of the
second generation, but that second-generation technology
4
Fig. 1. Number of mobile network operators in countries as of 2018. * The total number of countries with data is 189.
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H.Y. Kwon and S. Kim Telematics and Informatics 63 (2021) 101667
3. Methodology
The analysis uses the matched data of three nationally representative data: the World Telecommunication/ICT Indicators (WTID),
World Development Indicators (WDI), and the annual report data of the Freedom of the Press for the period 2001–2018. The WTID2 is a
database covering fixed-telephone, mobile-cellular, fixed-broadband, and mobile-broadband services. Data are collected from national
ICT ministries, telecommunication regulatory authorities, and national statistical offices based on common international statistical
standards to ensure comparability at the international level. The WDI3 provides the latest and most accurate global development data,
including national, regional, and worldwide estimates. Finally, the Freedom of the Press data4 is widely recognized as the world’s
leading source of comparative media environment data. We built the data set for analysis as panel data by matching the three primary
data sources above with country-specific codes. It includes data from 2001 to 2018 for a total of 194 countries. A summary of
descriptive statistics for the key variables used in this study is provided in Table 3.
3.2. Measurement
1) Dependent variable
Previous empirical studies used the number of subscribers or the subscriber percentage to measure the diffusion of mobile
communication network (Lee, 2008; Bohlin et al., 2010; Lee et al., 2011; Li and Lyons, 2012; Yates et al., 2013; Sagbansua et al., 2015).
This study used two different dependent variables depending on the timing of the generational transition of mobile networks. To
analyze the network transition from 2G to 3G, we used the population percentage capable of using 3G or higher mobile networks as the
dependent variable. Similarly, for the network transition from 3G to 4G, the population percentage who can use LTE/WiMAX or more
advanced networks is used as the dependent variable. This is because the generational transition to 3G and the generational transition
to 4G were recognized as two different events in this study. In both variables, the population represents the number of people who are
within the range of next-generation mobile network signals, irrespective of whether they are subscribers.
2) Independent variables
This study examined the impact of two major institutional factors on the generational transition of mobile network. The first in
dependent variable is whether the competition framework in the ICT market is well developed. Note that this study did not directly
reflect the degree of market concentration, which usually has been measured as the Herfindahl-Hirschman Index (HHI)5 in previous
studies. Instead, this study paid attention to the effect of developing a framework that promotes market competition. The ICT
Competition Framework Index data of the ICT Regulatory Tracker, designed by the ITU, was utilized as a proxy for the development of
competition framework in the ICT market. It is a measure of whether competition exists in each business area of ICT markets, such as
fixed-line, international mobile communication, digital subscriber line, and international gateway. Whether the ICT market ensures
free entry and allows foreign companies to participate in the competition is also reflected in this index. Therefore, the larger the index
score, the greater the development of competition framework in the ICT market.
The other independent variable considered in this study is whether the legal environment for media contents is well developed. The
legal environment index for media contents derived by the annual report published by Freedom House, a non-governmental inter
national research institute, was included in its measurement analysis. The legal environment index for media contents evaluates the
number of laws and regulatory systems that can affect media contents, including legal and constitutional guarantees for freedom of
expression, security laws and penalties for defamation, and whether there are systems for the freedom of information legislation. The
index value ranges from 0 to 30. The higher the index, the better the laws and systems for media contents, which can be interpreted as
more advanced institutional environment for producing, distributing and consuming media contents.
3) Control variables
To precisely assess the institutional factors’ impact, we control other factors known to affect mobile technology and networks’
deployment. First, the economic development measured in income or GDP is commonly pointed out as a determinant of mobile
broadband diffusion (Lee, 2008; Sagbansua et al., 2015). Considering that the more developed economies can promote a transition to
advanced mobile network generation, this study controled the per capita GDP and GDP growth rate. However, economic growth and
mobile networks’ deployment show a bidirectional relationship (Lam and Shiu, 2010). Note that from Fig. 2, the country’s GDP level in
US dollars and the dominant mobile networks’ development level tend to increase in parallel. Levendis and Lee (2013) also showed
that mobile networks’ diffusion might be fast in economically advanced countries. In the meantime, economic growth can be facili
tated in countries with fast penetration of mobile networks. This study’s analytic model controled economic factors using the previous
2
The WTID is managed by the International Telecommunication Union (ITU), the United Nations’ specialized agency for information and
communication technologies.
3
World Bank’s primary collection of development indicators, compiled from officially recognized international sources
4
The data is generated by Freedom House, non-profit non-governmental organization founded in 1941, that has been providing analytical reports
and numerical scores since 1980 for a total of 199 countries and territories.
5
Measuring market competition with HHI based on MNOs’ subscriber share also has limitations, since subscriber share and market revenue share
may vary considerably. This is because some operators could be much more successful than others in securing customers who tend to have higher
average revenue per unit and HHI does not reflect wholesale markets like sale of wholesale access to MVNOs (Allen et al., 2017).
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H.Y. Kwon and S. Kim Telematics and Informatics 63 (2021) 101667
Table 3
Summary of descriptive statistics.
Obs. Mean Median Std. Dev. Min max
*The maximum value can exceed 100% due to the inclusion of over-aged and under-aged students because of early or late school entrance and grade
repetition.
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H.Y. Kwon and S. Kim Telematics and Informatics 63 (2021) 101667
Table 4
Variables for the analysis.
Variable Measurement Source
Dependent Population 2G to 3G transition Population percentage that are within range of World
percentage of at least a 3G mobile-cellular signal Telecommunication/ICT
Generational Indicators, ITU
Transition
3G to 4G transition Population percentage that lives within range
of LTE/LTE-Advanced, mobile WiMAX/
Wireless MAN or other more advanced mobile-
cellular networks
Independent Institutional factors Development of competition ICT Competition Framework index ICT regulatory trackers,
framework in the ICT market ITU
Development of legal environment for Legal environment index for media contents Annual report, the
media contents Freedom of the Press
Controlled Economy GDP GDP per capita (current PPP): gross domestic World development
product divided by midyear population indicators, WB
GDP growth GDP per capita growth rate
Demographics Population Total population based on the de facto
definition of population
Pop growth Annual population growth rate expressed as a
percentage
Education Total enrollment in secondary World development indicators, WB.
education, regardless of age, expressed
as a percentage of the population of
official secondary education age
Access to electricity Percentage of the population with
access to electricity in the previous
year
Path dependency Overall development level of the World Telecommunication/ICT Indicators, ITU
mobile network in the previous year
MNGTit =β1 (Competition framework in the ICT market)it + β2 GDPit− 1 + β3 GDP Growthit− 1 + β4 Popit + β5 Pop Growthit
(1)
+ β6 Eduit− 1 + β7 Electricit− 1 + β8 PreMobileDevit− 1 +δi + εit
MNGTit =β1 (Legal environment for media contents)it + β2 GDPit− 1 + β3 GDP Growthit− 1 + β4 Popit + β5 Pop Growthit
(2)
+ β6 Eduit− 1 + β7 Electricit− 1 + β8 PreMobileDevit− 1 +δi + εit
MNGTit =β1 (Competition framework in the ICT market)it + β2 (Legal environment for media contents)it + β3 GDPit−
(3)
1
+ β4 GDP Growthit− 1 + β5 Popit + β6 Pop Growthit + β7 Eduit− 1 + β8 Electricit− 1 + β9 PreMobileDevit− 1 +δi + εit
where δi represents unobserved heterogeneous characteristics that exist in each country and εit represents a stochastic error term. The
dependent variable, MNGTit , (Mobile Network’s Generational Transition) represents the generational transition rate (population
percentage) of next-generation mobile networks in year t of country i. Eq. (1) estimates the impact of the development of competition
framework in the ICT market, and the model of Eq. (2) estimates the impact of the development of legal environment for media
contents on the dissemination of next-generation mobile networks. Both models include the same control variables discussed as
influencing factors on mobile networks’ penetration, from previous studies. First, GDP and GDP growth were used to take economic
factors into account. The model also included demographics such as population and education levels, electricity accessibility to
represent the degree of infrastructure development, and previous dominant network’s generation level to consider path dependency.
This study applied the fixed effect panel analysis method by setting δi as shown in Eqs. (1) and (2). It controlled for each country’s
unique characteristics, those that do not change over time, during the analysis period and can affect the proliferation of mobile
networks. For example, factors that remain unchanged during the analysis period, such as a country’s cultural and historical back
ground, geographical location, and distribution of deserts and mountains, can affect the mobile network’s generational change level.
Therefore, the analytical model should include these aspects to estimate institutional factors’ impact on mobile networks’ generational
transition accurately. Many studies have conducted cross-country comparisons of broadband network proliferation (Kim et al., 2003;
Garcia-Murillo., 2005; Cava-Ferreruela and Alabau-Muňoz., 2006; Lee and Brown., 2008). Still, their primary limitation was that the
estimates were endogenous, mainly because they were based on cross-sectional OLS regression that did not reflect country-specific
factors. This study significantly mitigated this problem by applying the fixed effect panel analysis method.
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H.Y. Kwon and S. Kim Telematics and Informatics 63 (2021) 101667
4. Empirical results
The fixed-effect panel analysis results suggest that the development of competition framework in the ICT market is a significant
factor of generational transitions in mobile networks. The result derived by the first empirical specification (Eq. (1)) showed that in the
ICT industry, when each business sector systematically promotes market competition and a more competitive framework is institu
tionalized, the transition to next-generation mobile networks will be promoted further.
This trend is consistent for the penetration rate of 3G during the transition from 2G to 3G (Table 5, (1) to (3)) as well as for the
penetration rate of 4G during the transition from 3G to 4G (Table 5, (4) to (6)). According to the results, when the development of
competition framework in the ICT market increases by one unit, the generational transition to 3G mobile networks increases by 2.08%
and the transition to 4G mobile network increases by 2.59% (Table 5, (3) and (6)). Although it is difficult to quantitatively compare
these two figures because the independent variables are index values, it can be said that if the competition framework in the ICT market
is well established, the generational transition to next mobile networks would be significantly promoted. Since this effect is robustly
significant at the 0.01 level, hypothesis 1 was supported empirically.
The fixed-effect panel analysis results also suggest that the development of legal environment for media contents is a significant
factor of generational transitions in mobile networks. The results confirm that the better legal environment for media contents, the
higher the penetration rate of 4G mobile networks during the transition period from 3G to 4G (Table 6). According to the empirical
results, as the development of legal environment for media contents increases by one unit, the generational transition to 4G increases
by approximately 3% at the significance level 0.01 (Table 6, (6)). However, during the transition period from 2G to 3G, the impact of
the development of legal environment for media contents on the generational transition of mobile networks was not statistically
significant. Although the analysis in Table 6, column (1) showed that the influence of the development of legal environment for media
contents is positive for the transition to 3G as well; additional control over education level, electrical infrastructure, and previous
years’ mobile network development level in columns (2) and (3) showed the effect was not robust. Thus, hypothesis 2 was empirically
supported only for the transition period from 3G to 4G.
The interesting result this study found is that institutional factors have a different pattern of influence. We observed this pattern
consistently when both factors were included in the analysis at the same time. In the analysis showed in [Table 7], the well-established
competition framework in the ICT market has increased the generational transition of mobile networks by 2.06% ([Table 7], (3)) and
2.12% ([Table 7], (5)), respectively, in both generational transitions. However, the development of legal environment for media
contents has increased the generational transition of mobile networks by 2.88% (Table 7, (6)) only during the transition from 3G to 4G.
The influence of the development of legal environment for media contents may be particularly significant during the transition from
3G to 4G because 4G is an essential infrastructure for full-fledged distribution of video and high-definition images.
On the other hand, looking at the influence of the control variables on the generational transition of mobile networks, the degree of
economic development (GDP), population, and education level had a consistently positive effect, which is the same as the results of
Table 5
The effect of the development of competition framework in the ICT market.
(1) (2) (3) (4) (5) (6)
3G 3G 3G 4G 4G 4G
Development of competition framework in the ICT market 3.243*** 2.108*** 2.077*** 4.473*** 3.784*** 2.592***
[0.258] [0.286] [0.327] [0.585] [0.718] [0.756]
GDP per capita, PPP (t-1) 0.000881*** 0.000741*** 0.000461** 0.00412*** 0.00416*** 0.00396***
[0.000177] [0.000193] [0.000212] [0.000373] [0.000453] [0.000443]
GDP growth (t-1) − 0.442*** − 0.179 − 0.107 − 0.0357 0.0484 − 0.00409
[0.131] [0.148] [0.149] [0.248] [0.343] [0.335]
Population, total 7.58e-07*** 3.44e-07*** 4.34e-07*** 2.23e-06*** 1.97e-06*** 1.58e-06***
[9.29e-08] [8.20e-08] [9.78e-08] [3.27e-07] [4.06e-07] [4.06e-07]
Population growth 2.784*** 0.0988 0.255 − 4.792*** − 7.367*** − 5.046*
[0.710] [1.087] [1.230] [1.764] [2.618] [2.602]
Education level (t-1) 0.336*** 0.299*** 0.626*** 0.475**
[0.0966] [0.100] [0.200] [0.203]
Access to electricity (t-1) 1.671*** 1.664*** 1.256*** 1.072***
[0.162] [0.166] [0.412] [0.405]
Previous mobile network development level (t-1)
2G 2.450 27.00***
[4.256] [9.554]
3G 3.261 43.78***
[5.054] [11.88]
4G 6.965 61.65***
[5.417] [12.73]
Constant − 40.69*** − 172.9*** − 169.3*** − 215.5*** − 357.4*** − 327.0***
[6.125] [13.25] [14.13] [17.34] [36.91] [37.02]
Observations 1,391 992 973 955 685 685
R-squared 0.242 0.366 0.359 0.294 0.353 0.389
Number of countries 183 158 158 182 151 151
Standard errors in brackets, *** p < 0.01, ** p < 0.05, * p < 0.1.
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H.Y. Kwon and S. Kim Telematics and Informatics 63 (2021) 101667
Table 6
The effect of the development of legal environment for media contents.
(1) (2) (3) (4) (5) (6)
3G 3G 3G 4G 4G 4G
Development of legal environment for media contents 1.260** 0.281 0.114 2.908** 3.442** 3.002*
[0.492] [0.533] [0.534] [1.227] [1.610] [1.565]
GDP per capita, PPP (t-1) 0.00197*** 0.00164*** 0.00105*** 0.00564*** 0.00622*** 0.00591***
[0.000238] [0.000278] [0.000335] [0.000598] [0.000789] [0.000762]
GDP growth (t-1) − 0.578*** − 0.330** − 0.218 − 0.353 − 0.626 − 0.621
[0.141] [0.164] [0.170] [0.270] [0.419] [0.404]
Population, total 8.37e-07*** 3.75e-07*** 4.41e-07*** 2.78e-06*** 1.84e-06** 1.01e-06
[1.20e-07] [1.09e-07] [1.32e-07] [5.97e-07] [7.76e-07] [7.74e-07]
Population growth 2.854*** 0.0564 1.280 − 2.826 − 9.542** − 6.897
[0.831] [1.344] [1.645] [2.945] [4.787] [4.641]
Education level (t-1) 0.384*** 0.351*** 0.786*** 0.651***
[0.123] [0.127] [0.236] [0.237]
Access to electricity (t-1) (% of the population) 2.062*** 2.027*** 1.197 0.705
[0.243] [0.251] [0.773] [0.756]
Previous mobile network development level (t-1)
2G 12.77** 40.84***
[5.160] [12.26]
3G 17.04*** 57.99***
[5.735] [14.52]
4G 21.32*** 76.09***
[6.091] [15.44]
Constant − 21.71** − 192.5*** − 190.4*** − 230.6*** − 369.5*** − 327.5***
[8.772] [20.43] [21.61] [29.24] [69.68] [69.40]
Observations 1070 772 751 635 465 465
R-squared 0.154 0.283 0.280 0.255 0.310 0.366
Number of countries 184 156 155 182 143 143
Standard errors in brackets, *** p < 0.01, ** p < 0.05, * p < 0.1.
Table 7
The effect of both institutional factors.
(1) (2) (3) (4) (5) (6)
3G 3G 3G 4G 4G 4G
Development of competition framework in the ICT market 2.655*** 2.016*** 2.059*** 2.780*** 2.119* 0.840
[0.309] [0.351] [0.399] [0.808] [1.089] [1.100]
Development of legal environment for media contents 0.833* 0.0962 − 0.0234 2.531** 3.134* 2.875*
[0.481] [0.522] [0.524] [1.218] [1.611] [1.575]
GDP per capita, PPP (t-1) 0.00130*** 0.00115*** 0.000765** 0.00539*** 0.00602*** 0.00584***
[0.000245] [0.000284] [0.000332] [0.000596] [0.000792] [0.000768]
GDP growth (t-1) − 0.434*** − 0.223 − 0.139 − 0.313 − 0.553 − 0.593
[0.138] [0.164] [0.167] [0.268] [0.418] [0.406]
Population, total 6.92e-07*** 3.19e-07*** 4.49e-07*** 2.32e-06*** 1.51e-06* 9.15e-07
[1.17e-07] [1.07e-07] [1.29e-07] [6.05e-07] [7.91e-07] [7.84e-07]
Population growth 3.902*** 1.051 1.576 − 2.397 − 8.444* − 6.542
[0.833] [1.322] [1.612] [2.915] [4.799] [4.667]
Education level (t-1) 0.256** 0.229* 0.707*** 0.618**
[0.122] [0.126] [0.239] [0.241]
Access to electricity (t-1) (% of the population) 1.922*** 1.939*** 1.117 0.696
[0.238] [0.246] [0.770] [0.757]
Previous mobile network development level (t-1)
2G 7.517 38.33***
[5.153] [12.71]
3G 6.324 54.72***
[5.986] [15.15]
4G 10.07 72.64***
[6.349] [16.10]
Constant − 50.83*** − 198.1*** − 200.3*** − 257.4*** − 381.7*** − 332.7***
[9.149] [19.96] [21.24] [29.96] [69.65] [69.79]
Observations 1064 770 751 634 465 465
R-squared 0.221 0.320 0.311 0.275 0.318 0.367
Number of countries 183 155 155 182 143 143
Standard errors in brackets, *** p < 0.01, ** p < 0.05, * p < 0.1.
10
H.Y. Kwon and S. Kim Telematics and Informatics 63 (2021) 101667
previous studies. This study also included the accessibility of electricity as a proxy control variable for power infrastructure, which also
had a positive effect on the overall penetration rate of mobile networks. However, the GDP growth rate and population growth rate did
not have a consistently significant impact statistically.
Major countries worldwide have actively pushed for the transition to next-generation mobile networks, expecting positive effects
on new industry development and economic growth. While many studies have identified factors affecting mobile networks’ intro
duction and dissemination, few studies have analyzed institutional factors. This study investigated the effect of the development of
competition framework in the ICT market and the development of legal environment for media contents on the generational transition
of mobile networks by building more complete panel data in countries worldwide and applying the fixed-effect panel analysis. This
analysis enabled us to grasp in detail the dynamics between factors in the next-generation mobile network’s generational transition
and solves endogenous problems existing in previous studies’ estimates.
The results of this study are as follows. First, the newly proposed institutional factors as a significant independent variable in this
study are identified as determinants of the mobile networks’ generational transition. It is empirically shown that the development of
competition framework that promotes competition in the ICT market would positively affect the introduction and settlement of a new
generation of mobile networks. The fact that the mobile communication market is oligopolistic, usually formed by three or four MNOs
in many countries and that the pace of deployment of mobile networks between countries varies, suggests a missing piece of the puzzle
in understanding how the mechanism of market competition affects mobile networks’ generational transition. Our results showed that
the competition framework that ensures sector-by-sector and inter-enterprise competition in the ICT market at any time, not the
market competition level itself, is an essential factor. Institutional development of competition framework in the ICT market promotes
market competition, facilitates business activities that provide new mobile communication technologies at an accessible price to
consumers in consideration of competition, thereby facilitating the generational transition of mobile networks. Thus it can be said that
the supply side factor could have a positive effect on the transition to next-generation mobile networks.
Second, an impressive result is that the development of legal environment for media contents positively affected only the
deployment of 4G mobile network, not 3G mobile network. In order to interpret results in depth, it is necessary to consider the various
features of mobile network technologies of 2G, 3G, and 4G. The network speed has been accelerated in the transition from 3G to 4G.
Stable transmission of high-definition video has become possible, i.e., the use of media contents through the mobile network has begun
in earnest during the transition period from the 3G to 4G. The result of this study suggests that the introduction and dissemination of
next-generation mobile networks such as 4G or 5G will be faster if the legal environment for producing, distributing and consuming
media contents is well developed. The better legal environment is established, the more media contents will be produced, distributed
and consumed, and accordingly there will be more demand for better mobile networks. Thus it can be also said that the demand side
factor could have a positive effect on the transition to next-generation mobile networks.
Furthermore, it is confirmed that economic development, population, education level, and access to electrical infrastructure
facilitate the generational transition of mobile networks. Previous studies have discussed that the proliferation of particular mobile
communication technologies in society depends on these factors. Through a comparative cross-country analysis using more than 143
countries over 18 years of data, this study confirms that those factors also positively affected the new mobile network’s generational
transition.
The importance of this study is notable. As it proved that the previously unexplained institutional factors are the determinants of
the generational transition of mobile network, the study suggests that the government needs to pursue a strategy of expanding and
maintaining an institutional framework that enables competition in the mobile communication market. It also suggested that the
transition to the next-generation mobile network can be accelerated when legal environment for media contents is well developed.
Accordingly, the next-generation mobile network should pay attention to media contents as its killer application as well as the enabling
environment for media contents. Most notably, demand for media contents such as YouTube and Netflix, which is expanding in
quantity and quality, leads to investment in the next-generation mobile network. The government’s role is to overhaul related
legislation further to smoothly enhance this expansion of demand without a hitch. The study also provided a clue to finding ways to
narrow the network gap between countries. Countries lagging behind in the deployment of advanced mobile networks need to
benchmark leading countries in terms of competition framework in the ICT market and legal environment for media contents, rather
than simply expanding infrastructure investment.
Besides, unlike the development and distribution of broadband in fixed networks, policy differences that consider technology
evolution’s characteristics and potential outcome by mobile network’s generational transition are essential. With 5G technology now
beginning to spread, in advance of its introduction, institutional discussions considering the distribution of IoT, 4 K, or 8 K ultra-high-
definition media contents and real-time interactive information delivery might have significance in the generational transition to 5G
network.
This study still has some limitations. First, potential endogenesis problems may remain. Estimates can still be exaggerated if each
country’s mobile technology capabilities change significantly over time, and the generational transition of mobile network depends on
them. Secondly, there are other policy factors, such as MNO’s investment policy, which can also affect the generational transition of
mobile networks. This study assumed that the ‘principles of a country’s MNO’s investment policy’ will not change over time during the
analysis period. We viewed MNO’s investment policy as a unique characteristic of each country and controlled it using the fixed effect
of the state. However, if there have been significant changes in MNO’s investment policy worldwide over the years, these controls may
not be perfect. Thirdly, institutional factors are measured as index proxy variables. Therefore, there are limitations in explaining
11
H.Y. Kwon and S. Kim Telematics and Informatics 63 (2021) 101667
mechanisms, specifically how institutions, laws, and policies facilitate the generational transition of mobile networks. Further research
could overcome this issue by dividing competition framework in the ICT market and legal environment for media contents into more
detailed items. For example, competition framework might be segmented into ‘facility-based’ competition framework and ‘service-
based’ one. Finally, the institutional factors affecting the generational transition from 4G to 5G and their influence may be different
from those confirmed in this study. For example, 5G mobile network is expected to cope with more industrial and vertical demands.
Therefore, the institutional factors, in particular the measurements of those factors, need to be reexamined in further research.
The authors declare that they have no known competing financial interests or personal relationships that could have appeared to
influence the work reported in this paper.
Acknowledgments
This work was supported by the Ministry of Education of the Republic of Korea and the National Research Foundation of Korea
(NRF-2019S1A3A2099973) and by the MSIT (Ministry of Science and ICT), Korea, under the ITRC (Information Technology Research
Center) support program (IITP-2020-0-01749) supervised by the IITP (Institute of Information & Communications Technology
Planning & Evaluation).
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