Modeling growth of cellular services in India: a systems dynamics approach

The cellular industry all over the world has been witnessing very high growth rates in subscriber base in recent years. For developing countries in particular, cellular services are becoming a very significant proportion of the overall telecom infrastructure. The mechanics of competition within this market involve complex feedback effects between individual service providers and with their operating environment, and these forces play an important role in governing the growth of this industry. In this paper, we use the systems dynamics methodology to develop an initial model of cellular service provision within the duopoly market structure. We report preliminary tests with the model using subscriber growth data for the Indian cellular industry over a period of twenty-one quarters. Sensitivity analysis test demonstrate the model´s potential as a decision support tool for service providers and policy makers.