This research focuses on the diffusion of digital mobile telecom technology among users, operators, and suppliers in China and thus tests the diffusion of innovation model with respect to successive generations of technology (i.e., 2G, 2.5G, and the new 3G).
The analysis of the macro-innovation environment reveals key issues affecting the rate of mobile telecom diffusion, such as country characteristics, digital and analogue mobile phone industry characteristics, and regulatory policies. A dual case study explores the key dimensions of mobile telecom diffusion in Shanghai and Chongqing, two areas with distinct geographic and economic profiles. The former is a showcase, high-growth area in southeast China; the latter is a developing area in western China. Four sets of variables help analyze the mobile diffusion: per capital gross domestic product, students in institutions of higher education, mobile telecom tariffs, and mobile telecom infrastructure investment. Over seven years, these four variables represent independent variables, and the number of mobile phone subscribers provides the dependent variable. Multiple regression analyses to forecast the dependent variable for both cities in the near future. Correlation analyses indicate if the dependent variable is correlated with the independent ones.
The more than 300 respondents to a survey questionnaire, from both Shanghai and Chongqing, constitute five adopter groups: pioneers, materialists, sociable, achievers, and traditionalists. Through semi-structured interviews, the author investigates these adopter groups, which has considerable implications for key suppliers that hope to target market segments and help them to cope with the challenges and opportunities represented by 3G functionality. Finally, in multiple interviews with Chinese mobile telecommunication experts, the author demonstrates that the role of network externalities and standardization is critical to the diffusion of mobile telecommunication.