Current 2G mobile telecommunications service providers are participating as major stockholders in consortia for IMT-2000 service that is scheduled to be provided from 2002. By the way, as the number of 3G subscribers increases, that of 2G may decrease. So for the profitability analysis of 3G, the demand for 2G as well as 3G should be considered.
This study, firstly, tries to forecast the demand for the total mobile telephone services as a voice call service category using time series or diffusion models. And then this study tries to forecast demand for each of 2G and 3G using multi-generation diffusion models.
Among diverse forecasting models, choice-based diffusion model and logistic model are found to be good at explaining and forecasting the demand for the total mobile telephone services. And Fisher and Pry model is proved to better explain the process of substitution between 1G and 2G than Norton and Bass Model.
Choice-based diffusion model is transformed according to the three hypotheses about the influence of price on the diffusion process. The first hypothesis is that price influences on market potential. The second is that price influences on diffusion speed. And the last is that price influences both on market potential and diffusion speed. Among the three variations of hypotheses, only the second is proved to be valid.
