European Journal of Scientific Research
ISSN 1450-216X Vol.40 No.3 (2010), pp.428-440
© EuroJournals Publishing, Inc. 2010
http://www.eurojournals.com/ejsr.htm
The Analysis of Cellular Services and Estimating Fixed to
Mobile Price Elasticities-A Case Study of United Kingdom
Syed Umar Farooq
Professor, Kardan Institute of Higher Education, Kabul, Afghanistan
Muhammad Imran Ullah
Chancellor, Abasyn University, Peshawar
Roeen Rahmani
Chancellor, Kardan Institute of Higher Education, Kabul, Afghanistan
Abstract
This paper seeks to undergo the systematic economic analysis of the rapid growth in
the U.K. telecom sector and demand for mobile services and the current developments in
telecom sector have been thoroughly discussed. The quarterly data from Ofcom telecom,
UK telecom regulatory authority of four cellular operators, and fixed line services from
1999Q2 to 2006Q4 have been analyzed in this paper. The UK Mobile demand model has
been made and it has been that the price elasticity (-0.52) is negatively related to the
volume of mobile. It was also found that the GDP (Gross domestic product) and
Subscribers both are positively related to the minutes of mobile telephone. The paper also
highlighted the estimated UK fixed line demand model. The price elasticity -0.943486 have
been found in the proceedings. It was also found that the GDP (Gross Domestic Product) is
positively related to the fixed line minutes.
1. Introduction
Mobile telephone brought a positive change in the people’s lives throughout the world. Mobile
telephone introduce in Europe and in Japan in 1980 and in U.S in 1983 and since from that date its
growth is around 25-30% a year such that at the end of year 1999 about 86 million mobile telephones
were in use in the U.S. (data from spring 2000 CTIA (Cellular Telecommunications Industry
Association) semiannual wireless industry.) only.
About 32% of all American use mobile telephone, ITU (International Telecommunication
Union) estimates that in 2002 the mob