The Advent of Smartphones and Switching Costs in Mobile Communications

22 Pages Posted: 10 Oct 2017

See all articles by Sung-Hwan Kim

Sung-Hwan Kim

Ajou University

Jinhan Jung

Korea Information Society Development Institute (KISDI)

Date Written: September 30, 2017

Abstract

We assess how the advent of smartphones affected consumer switching costs in the mobile communications market, using data from two surveys conducted in South Korea. A nested logit random utility model is employed to explain consumers’ choice over service type and carrier, and to estimate switching costs for each service type. We fail to identify whether the switching costs increased while smartphones were penetrating the market. Yet, comparing the switching costs across service types offers some evidence to how smartphones affected the switching costs. We suspect that the effect of reduced physical switching costs dominated at first, but was offset later by the rise in informational switching costs.

Keywords: Switching cost, Smartphone, Mobile communications, Nested logit

JEL Classification: D43, L13, L40, L96

Suggested Citation

Kim, Sung-Hwan and Jung, Jinhan, The Advent of Smartphones and Switching Costs in Mobile Communications (September 30, 2017). International Telecommunications Policy Review, Vol. 24, No. 3, 2017, Available at SSRN: https://ssrn.com/abstract=3050250

Sung-Hwan Kim (Contact Author)

Ajou University ( email )

Suwon
Korea, Republic of (South Korea)

Jinhan Jung

Korea Information Society Development Institute (KISDI) ( email )

JuAm-Dong 1-1
Gwacheon, GyeongGi-Do 427-710
Korea, Republic of (South Korea)

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
64
Abstract Views
398
rank
457,749
PlumX Metrics