An empirical analysis of demand for mobile services in Turkey

Abstract EN

We investigate the factors influencing the demand for mobile voice services in Turkey using firm level data that spans from January 2009 to December 2013.

Competition in the mobile telecommunication market in Turkey has become more intense as a result of the mobile number portability (MNP) service introduced in 2008 and 3G technology introduced in 2009.

The intense competition not only helps to keep prices down but also supports subscriber growth.

Besides prices, we believe that network effects have an impact on market growth.

Approximating sales levels using subscription levels and churn rates and using revenue per minute (RPM) as a price measure, we find that while price has a significant negative impact, network effects have a significant positive impact on the demand for mobile services in Turkey.

We also estimate own and cross price elasticities of firms operating in mobile telecommunication market.