Determinants and User Welfare Effects of Bundled Service Adoption in Broadcasting and Telecommunications Market 


Vol. 45,  No. 6, pp. 1016-1026, Jun.  2020
10.7840/kics.2020.45.6.1016


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  Abstract

This paper is an empirical analysis of factors affecting subscription to Korean Broadcasting and communications bundled services and the welfare effect of users. The discrete choice model based on the probabilistic utility function was used to estimate the demand function and to analyze the determinants of the bundled services and its marginal effects, and to measure the user welfare using the conjoint analysis method. According to the results of analysis, it is shown that the probability of joining the bundled service increases as the number of broadcasting and communication service is increased. Especially, when the broadband internet is used, the possibility of joining the bundled service is high. The more users switched to the service providers and the higher understanding of early termination fee, the more likely they were to join the bundled service. We estimated the benefit of 5,680 won per month when users combined one additional service. The benefit of user by service type was highest at 10,634 won per month for broadband internet bundled service, followed by mobile phone bundled service at 6,750 won per month. As a result of the comprehensive analysis, users recognize that the benefit of discount rate and transaction cost is more important than the concern about switching cost and early termination fee due to the change of service provider, and that broadband internet service is an important service in bundled service.

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  Cite this article

[IEEE Style]

E. Cho and J. Byun, "Determinants and User Welfare Effects of Bundled Service Adoption in Broadcasting and Telecommunications Market," The Journal of Korean Institute of Communications and Information Sciences, vol. 45, no. 6, pp. 1016-1026, 2020. DOI: 10.7840/kics.2020.45.6.1016.

[ACM Style]

Eunjin Cho and Jaeho Byun. 2020. Determinants and User Welfare Effects of Bundled Service Adoption in Broadcasting and Telecommunications Market. The Journal of Korean Institute of Communications and Information Sciences, 45, 6, (2020), 1016-1026. DOI: 10.7840/kics.2020.45.6.1016.

[KICS Style]

Eunjin Cho and Jaeho Byun, "Determinants and User Welfare Effects of Bundled Service Adoption in Broadcasting and Telecommunications Market," The Journal of Korean Institute of Communications and Information Sciences, vol. 45, no. 6, pp. 1016-1026, 6. 2020. (https://doi.org/10.7840/kics.2020.45.6.1016)

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pISSN : 1226 - 4717
eISSN : 2287 - 3880