DIFFERENCES IN MOBILE COMMUNICATION TECHNOLOGY: ASSESSING THE FACTORS AFFECTING CELLULAR MOBILE TELEPHONE DIFFUSION AT THE COUNTRY LEVEL By YANG-HWAN LEE A THESIS PRESENTED TO THE GRADUATE SCHOOL OF THE UNIVERSITY OF FLORIDA IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF ARTS IN MASS COMMUNICATION UNIVERSITY OF FLORIDA 2005 Copyright 2005 by Yang-Hwan Lee To my parents, Yu Lee and Jung Hur; my wife, Kyung Nam Doh; and my daughter, Amy Sihyun Lee ACKNOWLEDGMENTS Foremost, I would like to thank Dr. Sylvia M. Chan-Olmsted, who provided me with continuous support and guidance throughout my graduate career. Without her genuine support, this thesis could not have come to realization. She offered great academic insight and emotional support to me. I also owe much to Dr. Leonard Tipton and Dr. Justin Brown, who were always willing to help. They provided guidelines, encouragement, and knowledge in their area of expertise. I would like to thank all of my Korean friends in the College of Journalism and Communications. They provided consistent support and friendship throughout my master’s program. I also benefited enormously from Dr. Chang-Hoan Cho and Dr. Yoo- Jin Choi. They always helped me either academically and emotionally. My deepest appreciation goes to my parents, Yu Lee and Jung Hur, for their emotional and financial support. Their support enabled me to overcome all difficulties. I am also grateful for the patience and dedicated love of my wife, Kyung Nam Doh. She always believed in me and devoted herself to supporting me. Her heartfelt wish helped me greatly to finish the master’s program successfully. Thanks to them, my life has been full of joy. I shall never forget this memory with them and I wish their every happiness. iv TABLE OF CONTENTS page ACKNOWLEDGMENTS ................................................................................................. iv LIST OF TABLES........................................................................................................... viii LIST OF FIGURES .............................................................................................................x ABSTRACT....................................................................................................................... xi CHAPTER 1 INTRODUCTION ........................................................................................................1 2 LITERATURE REVIEW AND THEORETICAL FRAMEWORK............................5 The Development of Cellular Mobile Phone Technology............................................5 The Beginnings and Classification of Cellular Mobile Phone Technology..........5 The Pre-Cellular Mobile Era .................................................................................9 From Pre-Cellular Mobile to 1G ...........................................................................9 Digital Cellular Mobile: 2G - 2.5G .....................................................................11 Multimedia Cellular Mobile: 3G.........................................................................15 Broadband Cellular Mobile: 4G ..........................................................................19 The Global Cellular Mobile Phone Market ................................................................21 Various Cellular Mobile Phone Market in the World .........................................25 Europe, the Middle East and the African region..........................................26 The Asia Pacific region................................................................................28 The Americas ...............................................................................................30 Digital Divide between Developing and Developed Countries..................................31 Definitions of Developed and Developing Countries .........................................31 Digital Divide and Leapfrogging.........................................................................32 Theoretical Background..............................................................................................36 Factors Affecting the Diffusion of Cellular Mobile Phone Technology ....................40 Individual, Firm, and Country-Level Adoption and Diffusion ...........................40 Technology Infrastructure Factors ......................................................................42 Regulatory and Policy Factors.............................................................................44 Cultural Factors ...................................................................................................44 Demographic Factors...........................................................................................45 Other Integrated Studies......................................................................................46 Proposed Variables and Hypotheses...........................................................................47 v Economic Development Factors..........................................................................47 Economic Freedom..............................................................................................49 International Business Trade Openness...............................................................49 Technological Infrastructure Factors...................................................................50 Consumer-Related Factors ..................................................................................52 Political Environment..........................................................................................53 Cultural Factors ...................................................................................................55 Market Size..........................................................................................................56 Research Questions.....................................................................................................57 3 METHODOLOGY .....................................................................................................60 Research Method ........................................................................................................60 Sample Selection and Data Sources ...........................................................................61 Sample Selection .................................................................................................61 Data Source .........................................................................................................62 Variable Operationalization and Measurement ..........................................................62 Dependent Variable.............................................................................................62 Independent Variables and Measurement ...........................................................63 Economic development ................................................................................63 Technology infrastructure variables.............................................................64 Economic freedom .......................................................................................64 International business/trade openness ..........................................................65 Consumer-related variables..........................................................................65 Political environment ...................................................................................65 Cultural-related variables .............................................................................66 Digital divide measurement .........................................................................67 Statistical Procedures...........................................................................................69 4 RESULTS...................................................................................................................72 Descriptive Statistics ..................................................................................................72 Overall Cellular Mobile Phone Penetration in 103 Countries.............................72 Review of the Suggested Independent Variables ................................................76 Correlations between Variables and Multicollinearity...............................................79 Correlations between Variables...........................................................................79 Multicollinearity Problems..................................................................................81 Hypotheses Tests ........................................................................................................82 The Two-Way Random Effect Panel Regression................................................82 Hypotheses Tests.................................................................................................83 Research Questions.....................................................................................................85 Panel Regression versus OLS Regression...........................................................85 Major Factors from 1996 to 2002........................................................................89 Identifying Digital Divide in Cellular Mobile Phone Diffusion .........................91 Descriptive Statistics Review.......................................................................91 Empirical Test ..............................................................................................98 vi 5 DISCUSSION