Universal Telecommunication Service: an Empirical Analysis of the Indian Market ∗

We perform an empirical analysis of the Indian telecommunications market. We estimate different demand specifications and we show that, contrarily to the findings for developed countries, access price elasticity is significant and rather large. Moreover, income and other sociodemographic characteristics play a crucial role in explaining demand. We consider the impact of cellular penetration, identifying a network effect in low penetration areas and some evidence of substitution in the most developed ones. All results are robust to different econometric specifications, including the logistic diffusion model. We finally estimate a supply function, assessing the impact of market com-petition on investment