ESSYS IN THE ECONOMICS OF NETWORKS y MIRCE ION MRCU DISSERTTION PRESENTED TO THE GRDUTE SCHOOL OF THE UNIVERSITY OF FLORID IN PRTIL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF DOCTOR OF PHILOSOPHY UNIVERSITY OF FLORID 2008
2008 Micea Ioa Macu 2
To my family 3
CKNOWLEDGMENTS I thak my supevisoy commtee David Sappigto, Chuog i, Safod eg, ad James Seale fo thei pompt expet advice, fo thei patiece ad gaciousess i guidig me. I have leaed a geat deal fom them ad my othe pofessos, but also fom my colleagues ad fieds wh whom I have cossed hudles, shaed ideas ad laughs, ad who iiated me o thei cultue ad tadios. I would ot be hee whout the help of Lucetia ad Mihai, my mothe ad fathe i law. My godpaets Zoica ad Mihai, ad my bothe i law Nelu have povided ecouagemet ad made me laugh whe I eeded to. They ae always o my mid. Most of all I thak my wife Mihaela, my paets Ildi ad Micea, ad my siste Ligia who have bee by my side all these yeas. Whout thei sacifices, love, ad costat suppot this would ot have bee possible. I eve had to ask, ad I eve had a bette oppotuy to thak them. They ae the ispiatio fo who oe day I would like to become. While I hope to be able to epay all these special people, is likely as oe of my pofessos said that I will eve be able to do so fully. ut, as that same wise pofesso told me, the impotat thig is to emembe what othes have doe fo us, ad do the same fo those who follow i ou footsteps. 4
TLE OF CONTENTS CKNOWLEDGMENTS...4 LIST OF TLES...7 LIST OF FIGURES...8 LIST OF REVITIONS...9 STRCT...0 CHPTER INTRODUCTION...2 2 THE DIFFUSION OF MOILE COMMUNICTIONS IN COUNTRIES IN TRNSITION...6 page Itoductio...6 Modelig Mobile Techology Diffusio...9 The Numbe of Potetial doptes...20 The Timig Locatio Paamete...22 The Speed Gowth Paamete...22 Empiical Specificatio ad Data Desciptio...25 Estimatio Results...29 Coclusio...34 3 N EMPIRICL NLYSIS OF FIXED ND MOILE RODND DIFFUSION...42 Itoductio...42 Leatue Review...44 Empiical Studies o Global Fixed oadbad Diffusio...45 Empiical Studies o Global Mobile Diffusio...45 The Model, Method, ad Data...47 Fixed oadbad...47 Mobile oadbad...49 Results ad alysis...5 Fixed oadbad...5 Mobile oadbad...54 Cocludig Remaks...55 5
4 QULITY PROVISION IN TWO-SIDED MRKETS: THE CSE OF MNGED CRE...72 Itoductio...72 The Model...75 Patiets Decisio Makig...77 Physicias Decisio Makig...79 Pof Maximizatio...79 Iso-Elastic Distibutios of Health Risk ad Cost...84 Poposio. Chages i the Magial Utily of Qualy ad the Extealy Exeted by Doctos o Patiets...86 Poposio 2. Chages i the Distibutio of Teatmet Costs...87 Poposio 3. Chages i the MCO s Cost of Povidig Qualy...88 Poposio 4. Chages i the Distibutio of Health Risks...89 Poposio 5. Magude of Chages Due to Iceased Populatio Health Risk ad Magial Cost of Qualy...89 Poposio 6. Chages i the Numbe of Doctos i the Maket...90 Poposio 7. Chages i the Maximum Cost of Teatmet...9 Coclusio...9 PPENDIX EXPLNTORY ND INSTRUMENTL VRILES USED IN CHPTER 2, THEIR SOURCES, ND THE ESTIMTION METHOD...94 Defiio of Explaatoy Vaiables ad Data Souces...94 Istumetal Vaiable Defiios ad Ratioale fo Usig Them...95 Istumetal Vaiables Estimatio...96 DERIVTION OF THE MIN RESULTS IN CHPTER 4...97 Iso-elastic Distibutios of Health Risk ad Teatmet Cost...97 Deivatio of the Pof Maximizig Solutio...97 Sufficiet Codios fo Pof Maximizatio...99 Poof of Poposio. Chages i the Magial Utily of Qualy ad the Extealy Exeted by Doctos o Patiets...02 Poof of Poposio 2. Chages i the Distibutio of Teatmet Costs...04 Poof of Poposio 3. Chages i the Cost of Povidig Qualy...04 Poof of Poposio 4. Chages i the Distibutio of Health Risks...05 Poof of Poposio 5. Magude of Chages Due to Iceased Populatio Health Risk ad Magial Cost of Qualy...06 Poof of Poposio 6. Chages i the Numbe of Doctos i the Maket...08 Poof of poposio 7. Chages i the Maximum Cost of Teatmet...08 LIST OF REFERENCES... IOGRPHICL SKETCH...7 6
LIST OF TLES Table page 2- Numbe of digal mobile opeatos...36 2-2 Fome socialist couties: desciptive statistics...37 2-3 Empiical aalysis of mobile telecommuicatios diffusio: diffeet factios of potetial adoptes fo each goup...38 2-4 Empiical aalysis of mobile telecommuicatios diffusio: commo factio of potetial adoptes fo all goups...39 2-5 Cumulative effect o cellula peetatio of a oe stadad deviatio icease i socioecoomic chaacteistics, o a 0 to chage i the dummy vaiables of eest...40 3- oadbad peetatio ate top 5 OECD couties, by techology, Decembe 2006...58 3-2 Mobile boadbad 3G Mobile peetatio top 5 OECD couties, 2005...59 3-3 Mai empiical studies of fixed ad mobile boadbad diffusio...60 3-4 Vaiables, measuemet ad data souces fo statistical aalysis fixed boadbad...63 3-5 Vaiables, measuemet ad data souces fo statistical aalysis mobile boadbad...64 3-6 Logistic egessios of boadbad peetatio...65 3-7 Sample coelatio matix of vaiables used i mobile boadbad aalysis...66 3-8 Liea egessios of mobile boadbad peetatio...67 4- The effect of paamete iceases o maaged cae eimbusemet, ualy, umbe of doctos, magial health isk, ad isuace pemium...0 7
LIST OF FIGURES Figue page 2- Evolutio of cellula peetatio ates i the Czech Republic ad Estoia...4 3- Cable-modem boadbad subscibes pe capa i the Ued States...68 3-2 DSL subscibes pe capa i the Ued States...69 3-3 Cable-modem boadbad subscibes pe capa i Japa...70 3-4 DSL subscibes pe capa i Japa...7 8
LIST OF REVITIONS DSL FO FTTH GDP ITU MCO OECD PC USD W WDI Digal Subscibe Lie Food ad gicultue Ogaizatio Fibe To The Home Goss Domestic Poduct Iteatioal Telecommuicatios Uio Maaged Cae Ogaizatio Ogaizatio fo Ecoomic Coopeatio ad Developmet Pesoal Compute Ued States Dolla Wold ak Wold Developmet Idicatos 9
Chai: David E. M. Sappigto Majo: Ecoomics bstact of Dissetatio Peseted to the Gaduate School of the Uivesy of Floida i Patial Fulfillmet of the Reuiemets fo the Degee of Docto of Philosophy ESSYS IN THE ECONOMICS OF NETWORKS y Micea Ioa Macu Decembe 2008 I coducted thee studies i the ecoomics of etwoks. I the fist study I estimate a logistic model of mobile commuicatios diffusio to examie the impact of competio o cellula peetatio i fome socialist couties i Easte Euope ad Cetal sia. I fid that digal techology ad the oductio of competio iceased the speed of diffusio of mobile commuicatios. Couties had to choose whethe to awad moe liceses fom the begiig, o delay competio ad awad digal mobile liceses seuetially. Seuetial ety had a geate impact tha simultaeous ety, compesatig fo the delay i the oductio of competio. Lage ad iche couties oduced competio ealie, ad teded to awad moe tha oe digal mobile licese iially. Failue to accout fo this selectivy leads to upwad biased estimates of the effect of competio o cellula peetatio. oadbad commuicatios lie at the heat of the developig ifomatio society. I the secod study I aalyze the factos that ifluece the diffusio of fixed ad mobile boadbad. Usig 999-2005 OECD data, the logest available pael to date, we fid that local loop ubudlig, PC peetatio, populatio desy, ad Iteet cotet ae all associated wh highe fixed boadbad diffusio. Platfom competio is a sigificat dive of cable modem boadbad, but ot DSL diffusio. Multiple stadads policy, mobile applicatio pice, ad 0
populatio desy ifluece the diffusio of mobile boadbad. We also fid that fixed boadbad is ehe a complemet o a substute fo mobile boadbad yet. Recet developmets i the ecoomics of etwoks have show the potetial fallacies of usig oe-sided logic i two-sided makets. I the thid study I develop a two-sided maket model to aalyze the picig ad ualy decisios of a pof maximizig maaged cae ogaizatio MCO i the pesece of idiect etwok extealies betwee doctos ad patiets. The maaged cae ogaizatio faces tade-offs whe choosig the ualy of sevice, isuace pemiums, ad physicia eimbusemets. These tade-offs deped o patiet health isk ad physicia cost distibutios, the elasticy of supply of physicias wh espect to eimbusemets, the magial cost of sevice ualy, ad the magial utily deived by patiets fom access to a boade etwok of physicias ad the ualy of health sevices. I the case of iso-elastic distibutios of patiet health isk ad physicia cost of teatmet, a icease i the cost of povidig ualy deceases the ualy povided by the MCO, which leads to fewe policyholdes, lowe physicia eimbusemets, ad fewe doctos i the pefeed etwok. The isuace pemium also deceases. icease i the health isk of the populatio esults i lowe ualy, lowe eimbusemets, ad fewe physicias i the MCO s etwok. The isuace pemium also deceases, but the decease is smalle tha the decease i idividuals utily due to lowe ualy ad fewe physicias, which leads to fewe policyholdes.
CHPTER INTRODUCTION I coduct thee studies. Study is The Diffusio of Mobile Commuicatios i Couties i Tasio, study 2 is Empiical alysis of Fixed ad Mobile oadbad Diffusio, ad study 3 is Qualy Povisio i Two-sided Makets: the Case of Maaged Cae. Studies ad 2 ae empiical studies of diffusio of ew techologies i which etwok extealies play a impotat ole. They ae theefoe methodologically simila i that they ae based o the oliea, logistic model of techology diffusio. Study 3 is also coceed wh etwok extealies, oly this time i the case of etwoks of doctos ad patiets. I the fist study I aalyze the diffusio of mobile commuicatios i couties i tasio. These ae fome socialist couties i Easte Euope ad Cetal sia. I estimate a logistic model of diffusio to examie the ole of socio-ecoomic chaacteistics ad the impact of competio o cellula peetatio i these couties. I use a caefully costucted set of istumetal vaiables specific fo ecoomies i tasio to impove upo existig studies by addessig the edogeous atue of the elatioship betwee wielie ad wieless commuicatios. Moe impotatly, I take o accout the fact that couties may self-select whe makig key decisios such as the timig of the oductio of competio, o the atue of competio simultaeous vesus seuetial. If, fo example, couties that oduced competio ealie ae also those that would have beefed the most fom doig so, the simple least suaes techiues would ovestate the effect of competio o the speed of cellula commuicatios adoptio. Simultaeous competio efes to the ety of two o moe digal mobile commuicatios opeatos duig the fist caleda yea of digal mobile commuicatios pesece i a couty. Seuetial competio efes to ety occuig duig a subseuet caleda yea, afte oly oe digal cellula commuicatios povide was iially peset i the maket. 2
I fid that the oductio of competio acceleated the ates of cellula adoptio sigificatly. Seuetial ety had a moe poouced impact tha simultaeous ety, compesatig fo the delay i the oductio of competio, pehaps though moe aggessive picig by late etats i ode to establish themselves i the maket. s expected, the level of adoptio was sigificatly lowe duig the aalog ea due to capacy costas ad elatively high pices. Couties wh a highe icome pe capa had moe cellula subscibes iially, but this advatage declied ove time as mobile sevices became less expesive. Couties wh a highe umbe of fixed lies pe capa expeieced lowe iial levels of cellula adoptio, but highe subseuet gowth. The highe speed of adoptio could be the esult of supply iceases due to iceased ivaly betwee the two techologies. lteatively, could be that the two techologies ae ot ivalous ad posive diect etwok effects domiate. Shotages wee commo i socialism. sigificat factio of the populatio could ot get access to telecommuicatios sevices. Couties wh a highe factio of people waig fo a fixed lie coectio had a lowe iial umbe of mobile subscibes, but faste subseuet gowth. The secod study examies the diffusio of fixed ad mobile boadbad. It is jo wok wh Sagwo Lee fom the Depatmet of Joualism ad Commuicatios. oadbad commuicatios play a extemely impotat ole i the developig of the ifomatio society. Widespead boadbad diffusio ecouages iovatio, cotibutes to poductivy ad gowth, ad attacts foeig ivestmet. Thee is a gowig body of leatue o fixed boadbad diffusio, but thee ae still vey few coss-cultual empiical studies examiig the impotat ifluetial factos of global 3
boadbad diffusio. Results ae ot always cosistet, ad isufficiet data has peveted pevious studies fom captuig the oliea atue of boadbad diffusio. I addio, i spe of s sigificace ad implicatios, thee is o empiical study to ou kowledge about ifluetial factos of mobile boadbad diffusio because mobile boadbad deploymet bega oly i ecet yeas. Fo the same easo, we ae ot awae of ay study that ivestigates whethe fixed boadbad is a complemet o a substute fo mobile boadbad. Usig 999-2005 OECD 2 data, the logest available pael to date, we estimate a logistic egessio to captue the oliea atue ad examie the ifluetial factos of fixed boadbad diffusio. We fid that local loop ubudlig, PC 3 peetatio, populatio desy, ad Iteet cotet all ifluece boadbad diffusio. Platfom competio is a sigificat dive of cable modem boadbad, but ot DSL diffusio. alyzig data fom 2005 fo a coss-sectio of 5 couties we also fid that multiple stadads policy, mobile applicatio pice, ad populatio desy ifluece the diffusio of mobile boadbad. Ou esults idicate that fixed boadbad is ehe a complemet o a substute fo mobile boadbad yet. Study 3 exteds the leatue o two-sided makets by developig a two-sided platfom model of maaged cae ogaizatios MCOs that fo the fist time aalyzes the ualy of sevice povided by the emediay platfom, ot just s picig decisios. This is also oe of the fist studies to apply the theoy of two-sided makets to health cae ogaizatios. The mai featue of two-sided makets is the pesece of two-way idiect extealies betwee paticipats o diffeet sides of a emediay platfom, usually buyes ad selles. 2 Ogaizatio fo Ecoomic Coopeatio ad Developmet. 3 Pesoal Compute 4
Patiets cae about the umbe of doctos i the MCO s pefeed etwok, while physicias cae about the umbe of patiets eolled i the MCO ad thei health isk. I fid that isuace pemiums, physicia eimbusemets, ad the ualy of maaged cae sevices eflect the magude of the idiect extealies. Iceases i populatio health isk, such as those caused by populatio agig, lead to deceases i the MCO s ualy of sevice, physicia eimbusemets, ad umbe of doctos i the pefeed etwok. Iceases i the magial cost of ualy povisio also lead to lowe maaged cae ualy, physicia eimbusemets, ad umbe of doctos i the MCO s pefeed etwok. The magude of these chages depeds o the patiets pefeece fo ualy, the magude of the extealy exeted by doctos o patiets, the shape of the distibutio of health isks, ad the elasticy of the supply of physicias wh espect to eimbusemets. 5
CHPTER 2 THE DIFFUSION OF MOILE COMMUNICTIONS IN COUNTRIES IN TRNSITION Itoductio Recet studies suggest that a pioy fo developig couties seekig to catch up wh the developed wold is to develop thei ifastuctue apidly. 4 Give thei histoy of udeivestmet i telecommuicatios ad give the apid pace of techological chage i ecet decades, fome socialist couties i Easte Euope ad Cetal sia 5 have pobably moe to gai by ivestig i telecommuicatios tha i ay othe utily secto. Techological iovatio, i paticula the developmet of mobile commuicatios, has made possible fo these couties to make up fo time lost, ad develop thei commuicatios ifastuctue apidly ad at elatively low cost. Less tha fiftee yeas afte the fist of these fome socialist couties adopted mobile techology, the couties exhib a wide aay of cellula peetatio levels, agig fom less tha 0% i most fome Soviet Uio epublics to almost 85% i the Czech Republic at the ed of 2002. Duig this shot time spa, cellula peetatio has fa outgow fixed lie commuicatios i some of these couties. It seems impotat the to explai the success of leadig couties ad the iabily of othe couties to capalize o this oppotuy. Socioecoomic factos, such as the level of ecoomic developmet of each couty, cetaily played a impotat ole i detemiig the elative success of the couties. ut pat of the success may be due to govemet policies affectig the adoptio of cellula techology. These couties faced seveal impotat decisios, fom the adoptio of a paticula techological stadad to the timig ad umbe of mobile liceses awaded to poduces. 4 See Poot 2000 fo a sythesis of empiical eseach o the impact of govemet o log-u gowth, icludig the impact of public ifastuctue ivestmet. 5 I will heeafte efe to these couties as fome socialist couties o tasio couties. 6
mog these decisios, the oductio of competio ad the timig of liceses had a paticulaly impotat impact o the level ad speed of mobile commuicatio diffusio. 6 Thee ae vey few studies of mobile commuicatios diffusio. The most otable ae the studies by Pake ad Rölle [997] o the U.S. mobile telephoe idusty, ad those by Gube & Vebove [200a, b], oe focusig o the Euopea Uio membe couties, the othe oe moe extesive i coveage, icludig ove 50 developed ad developig couties. bstactig fom techological aspects ad the timig of fist liceses, Pake ad Rölle used a stuctual model to focus moe deeply o competio. They foud that the oductio of duopolies i U.S. states had a sigificat posive effect, though the effect was elatively small. Gube ad Vebove s fidigs ae that eal GDP pe capa, the size of the fixed telephoe etwok, ad the size of the waig list fo fixed lies ae all impotat detemiats of cellula diffusio. They also foud that competio, techological stadads, ad the oductio of digal techology played a impotat ole i acceleatig the diffusio of mobile commuicatios. The effect of competio was cosideably lage duig the digal ea, as the shap capacy icease bought about by digal techology made competio much moe effective. thid study by Gube [200] focused o 0 Cetal ad Easte Euopea couties, out of the 9 tasio couties that ae aalyzed i this pape. While this study also foud a posive impact of competio o cellula peetatio, did ot fid a sigificat effect of digal techology ad eal GDP pe capa o mobile commuicatios diffusio. s Gube himself adms, these esults ae puzzlig i light of covetioal wisdom ad his jo wok wh Vebove. possible explaatio could be the small umbe of obsevatios oly 64. y 6 Wh vey few exceptios, the fome socialist couties adopted GSM as thei digal techological stadad. Theefoe, is ulikely that techological stadads cotibuted sigificatly to the diffeece i outcomes betwee couties. 7
997, the last yea i Gube s dataset, tasio couties had elatively limed mobile commuicatios expeiece, especially wh digal techology. cosideable umbe of yeas have passed sice the ad a ew empiical ivestigatio of cellula commuicatios diffusio i tasio couties is waated. I aalyze the diffusio of mobile commuicatios i 9 out of the 27 fome socialist couties i Easte Euope ad Cetal sia fom 990 to 2002. The peset study employs a caefully costucted set of istumetal vaiables specific fo ecoomies i tasio to impove upo existig studies by addessig the edogeous atue of the elatioship betwee wielie ad wieless commuicatios. Moe impotatly, takes o accout the fact that couties may self-select whe makig key decisios such as the timig of the oductio of competio, o the atue of competio simultaeous vesus seuetial. 7 If, fo example, couties that oduced competio ealie ae also those that would have beefed the most fom doig so, the simple least suaes techiues would ovestate the effect of competio o the speed of cellula commuicatios adoptio. I fid that the oductio of competio acceleated ates of cellula adoptio sigificatly. Seuetial competio had a moe poouced impact tha simultaeous competio, pehaps due to moe aggessive picig by late etats i ode to establish themselves i the maket. s expected, the level of adoptio was sigificatly lowe duig the aalog ea due to capacy costas ad elatively high pices. Couties wh a highe icome pe capa had moe cellula subscibes iially, but this advatage declied ove time as mobile sevices became less expesive. Couties wh a highe umbe of fixed lies pe capa 7 Fo the puposes of this study, simultaeous competio meas the ety of two o moe digal mobile commuicatios opeatos duig the fist caleda yea of digal mobile commuicatios pesece i a couty. Seuetial competio efes to ety occuig duig a subseuet caleda yea, afte oly oe digal cellula commuicatios povide was iially peset i the maket. Due to capacy limatios, oe of the fome socialist couties oduced competio duig the aalog ea, wh the possible exceptio of Russia, which was excluded fom the aalysis due to s elative size compaed to all othe couties i the egio. 8
expeieced lowe iial levels of cellula adoptio, but highe subseuet gowth. The highe speed of adoptio could be the esult of supply iceases due to iceased ivaly betwee the two techologies. lteatively, could be that the two techologies ae ot ivalous ad posive diect etwok effects domiate. Couties wh a highe factio of people waig fo a fixed lie coectio had a lowe iial umbe of subscibes, but faste subseuet gowth. The est of the pape poceeds as follows. Sectio 2 pesets the logistic model of cellula techology diffusio employed. Sectio 3 pesets the data ad the empiical specificatio. Sectio 4 pesets ad discusses the esults. Sectio 5 cocludes. Modelig Mobile Techology Diffusio Whe aalyzig the adoptio of ew techologies, is essetial to accout explicly fo the pevailig stages of adoptio Dekimpe et al. [998]. Fo a vaiety of cultual ad socioecoomic easos, some couties adopt ew techologies ealie tha othes. If leadig couties ae also the oes to fist adopt cetai policy decisios, such as the oductio of competio, the a simple coss sectio aalysis would iappopiately attibute the highe level of cellula peetatio i ealy adoptig couties to the implemetatio of the espective policy decisio. Followig Gube ad Vebove [200b], I use a logistic fuctio to model the diffusio of mobile techology i ode to accout fo s dyamic atue. The logistic specificatio is appealig because povides a meas of captuig the existece of etwok extealies i mobile telephoy. The flow of ew adoptes is elated to the stock of existig subscibes i a way simila to that of epidemic models. Iially, the flow of adoptes is small. s the stock of cellula subscibes iceases, moe ad moe people adopt the techology, leadig to a expoetial icease i the umbe of adoptes. Howeve, the flow of subscibes declies as the stock appoaches the total umbe of potetial adoptes i the maket. Ove time, the diffusio of 9
the ew techology thus follows the classic S shaped patte. The logistic specificatio appeas to appoximate well the actual evolutio of cellula peetatio ates, as ca be see fom Figue 2- depictig the evolutio of cellula peetatio ates i the Czech Republic ad Estoia, two of the most advaced tasio couties i tems of cellula peetatio see appedix. Lettig y deote the total umbe of idividuals i couty i that adopted cellula techology by time t, ad lettig logistic diffusio euatio is * y deote the total umbe of potetial adoptes, the stadad y * y exp a b t, 2- whee a ad b ae paametes, as discussed below. The shape of this fuctio is detemied by thee elemets: the umbe of potetial adoptes, the timig of iial adoptio, ad the speed of adoptio. The Numbe of Potetial doptes Not all idividuals i a couty adopt a ew techology, such as mobile telephoy. Regadless of how iexpesive mobile telephoy might become, some idividuals eve choose to cosume the sevice. The total umbe of potetial adoptes as a factio γ i of total populatio POP * y i a couty may be specified y * γ POP. 2-2 i This factio vaies wh icome, pices, the factio of uba populatio, ad othe couty chaacteistics. 8 I pactice, the estimatio of the umbe of potetial adoptes poses sigificat poblems. I piciple, this potetial could be estimated as a fixed effect fo each 8 Ufotuately, as i othe studies, eliable data o the pice of mobile sevices is ot available fo my sample. 20
couty. Howeve, most fome socialist couties wee i thei ealy stages of cellula adoptio thoughout the 990s. Theefoe, thee ae isufficiet obsevatios to estimate cosistetly the potetial umbe of adoptes i each couty. 9 solutio to this poblem is to pool the data ad estimate a commo factio of potetial adoptes fo a goup of couties, exploig the fact that diffeet couties ae i diffeet stages of adoptio. I estimate the commo factio of potetial adoptes fo all couties fom Euatio 2- usig oliea least suaes, afte addig a mea zeo distubace tem, whout icludig couty chaacteistics i the estimatio. 0, Oce estimated, I teat the factio of potetial adoptes as a kow paamete, as i Dekimpe et al. 2 Thee is cosideable heteogeey i socioecoomic chaacteistics eve betwee fome socialist couties i my sample. To accout fo this heteogeey, I futhe divided the couties o fou goups, ad allowed each goup to have a diffeet factio of potetial adoptes. Couties wee divided o goups based o geogaphic ad histoical cosideatios i ode to educe as much as possible the heteogeey due to both obsevable ad uobsevable factos. 3 The fou goups ae: the altic States, the othe fome membes of the 9 The difficulty i estimatig the factio of potetial adoptes is ot a poblem oly i this study. y the time eseaches have eough obsevatios to estimate the potetial of a maket, that potetial is typically well kow, ad estimatios ae of limed impotace. 0 This is also the appoach i Gube ad Vebove 200a, justified by the elative homogeey of the Euopea Uio membe couties they aalyzed. Regessios i which the factio of potetial subscibes vaies liealy wh the eal GDP pe capa ad the factio of people i each couty livig i uba aeas poduced ueasoable esults fo some couties, such as egative factios of potetial adoptes. This esult might eflect the absece of data o the pice of mobile sevices. 2 Dekimpe et al. [998] suggest that paametes of adoptio euatios ca be estimated seuetially istead of simultaeously. They teat the total umbe of potetial adoptes as a kow paamete. Thei decisio is based upo idusty eviews. They defie the total umbe of potetial adoptes i each couty as the pecetage of leate people livig i uba aeas ad havig sufficiet icome to affod basic telephoe sevice. 3 Koceda 200, ad Kuta ad Yig 2004 use a simila divisio of these couties based o geogaphical ad istutioal cosedeatios ad fid evidece of covegece i macoecoomic fudametals whi goups. 2
Commowealth of Idepedet Sates CIS, the alkas, ad couties i Cetal Euope CE. list of couties i each goup is peseted i Table 2-. Iteestigly, this geogaphicalhistoical divisio captues most of the heteogeey i the levels of adoptio eached by couties at the ed of 2002. The Timig Locatio Paamete The paamete a i Euatio 2- idicates the lag lead i adoptig the ew techology. It detemies the iial level of adoptio. 4 posive value shifts the S shaped fuctio upwads while a egative oe shifts dowwads, whout modifyig the S-shape. The Speed Gowth Paamete The paamete b i Euatio 2- measues the speed of diffusio. Diffeetiatig Euatio 2- wh espect to time povides dy dt y * y y b. 2-3 * y Euatio 2-3 shows that b is eual to the gowth ate i the umbe of adoptes, elative to the factio of potetial subscibes who have ot yet adopted the techology. The secod y deivative is posive fo y < * 2 y, ad egative fo y > * 2. 5 The umbe of adoptes thus follows a symmetic S-shaped patte, the maximum speed beig eached whe half of the total umbe of potetial subscibes has adopted the ew techology. y * y as t e 4 Note that 0 a. 2 d y 5 The secod deivative is 2 dt * * * 2 y y y 2y b y. y y * 22
The locatio ad gowth paametes ca be allowed to vay wh couty chaacteistics ad policy vaiables, as i Euatios 2-4 ad 2-5 J 0 j j a i D X j 2-4 J 0 j j b i D X j The vaiables place at time fo t < j T i. 2-5 j D ae dummy vaiables captuig the effect of cetai evets j that take j T i i couty i the oductio of competio fo example. Thus j D euals zeo, ad euals oe fot. The vecto X icludes cotiuous vaiables affectig both j T i 0 0 the timig ad the speed of adoptio. The paametes i ad i ae couty-specific timig ad speed fixed effects. They captue diffeeces i the timig ad speed of adoptio due to couty chaacteistics that ae ot icluded i the model. ll paametes wh the exceptio of the speed ad timig couty fixed effects, ad 0, ae assumed to be the same fo all couties. 0 i i Followig Gube ad Vebove [200b], I allow evey evet to impact both the locatio ad gowth paametes. Howeve, I test the estictio that a evet j D does ot lead to a discotiuous jump o fall i the umbe of subscibes, ad impose the estictio fo the evets fo which I could ot eject. 6 Fo the estictio to hold, the umbe of subscibes immediately befoe the occuece of the evet should eual the umbe of subscibes immediately afte the evet occued. That is 6 I could ot eject the hypothesis that o discotiuy was caused by the oductio of competio. Imposig t j T i estictio 6 makes the effect at yeas fom the oductio of competio to be the same acoss couties. Howeve, the existece of discotiuies could ot be ejected fo the oductio of digal mobile commuicatios. This eflects the shap icease i capacy associated wh digal techology. 23
0 i 0 i k j k D j k k j 0 X k D k i k j i k D i k 0 j X X T k j k D j i k X T j i, 2-6 which simplifies to j j j Ti. 2-7 The evets fo which costa 2-7 holds imply oly a chage i the speed of adoptio. Let J deote the set of these evets, ad K deote the set of evets that lead ot oly to chages i the speed of adoptio, but also to discotiuies i the level of adoptio. Whe the potetial umbe of adoptes is kow, the followig tasfomatio which pems a simple liea fom of Euatio 2- is possible y l z a bt y y. 2-8 * The depedet vaiable, z, is the atual logahm of the factio of potetial adoptes that did ot adopt by time t, but that adopt at time t. Note that z ca be ewte i tems of cellula pe capa peetatio ates as z m l a bt i m γ, 2-9 whee y m is the pe capa mobile peetatio ate. Pop Substutig 4 o 7, ad accoutig fo estictio 6 povides z 0 0 j j j X X t D t T i i j J i k K k D k k K k D k t 2-0 Euatio 2-0 ca be estimated usig stadad least suaes dummy vaiables ad istumetal vaiables techiues by addig a mea zeo distubace tem. Restictio 2-7 ca be 24
j tested by icludig i Euatio 2-0, ad applyig stadad F ad t tests o the sigificace j of paametes. Oe estimatio coce is the elatively lage umbe of paametes that must be estimated, sice thee is both a locatio ad a gowth paamete fo each couty. ecause of the 0 lieay of 8, the locatio paametes i behave as stadad fixed effects i least suaes 0 dummy vaiables egessio. The gowth paametes i howeve will be icosistet uless the umbe of obsevatios fo each couty is sufficietly lage. To addess this issue, I use a appoach simila to the oe I used to estimate the umbe of potetial adoptes. I paticula, I am assumig that all couties whi a goup have the same locatio ad speed fixed effects. 7 The umbe of fixed effects to be estimated the is oly six, istead of thy-six, two less tha twice the umbe of couties. 8 Empiical Specificatio ad Data Desciptio The focus solely o fome socialist couties implies some limatios, but also povides some advatages. I paticula, the elative homogeey of these couties is well-sued fo the customay assumptio of commo paametes of eest acoss all couties. I aalyze 9 of the 27 fome socialist couties i Easte Euope ad Cetal sia betwee 990 ad 2002. Seveal couties wee excluded fom the aalysis because of missig data osia ad Hezegovia, elaus, Macedoia, Tajikista, Tukmeista, ad Yugoslavia. 9 Sloveia was excluded because had a much highe level of GDP pe capa tha all othe fome socialist 7 Gube ad Vebove [200b] addessed the same poblem by imposig patial o complete covegece i the level of adoptio betwee couties, thus estictig the speed paametes. 8 Sice we ae dealig wh dummy vaiables, the locatio ad gowth paametes of oe goup ae excluded to avoid multicolieay. The emaiig thee pais of estimated locatio ad gowth paametes epeset diffeeces i the iial level of adoptio ad the subseuet speed of adoptio elative to the excluded goup, that of Cetal Euopea couties. 9 Some of these couties expeieced amed coflicts duig the peiod of study. 25
couties, ad my empiical methodology pesumes homogeey betwee goups of couties. 20 Russia was excluded because is a outlie amog fome socialist couties both i tems of populatio ad lad aea. Russia ca be cosideed as havig seveal telecommuicatio makets. It would be iappopiate to assess the competiveess of these idividual makets based o aggegate data fo all of Russia. The level of adoptio ad speed of adoptio vay wh couty socioecoomic chaacteistics see Euatio 2-0. The couty chaacteistics icluded i X ae eal GDP pe capa expessed i costat 995 USD, the umbe of mailies pe capa, ad the atio betwee egisteed applicatios fo a fixed lie ad the umbe of mailies i sevice waig list. 2 Mailies ae fixed telephoe lies coectig the subscibe s temial euipmet to the public swched etwok. Thoughout the pape I use the tems mailies, fixed lies, ad wielies echageably. Desciptive statistics ae peseted i Table 2-2. 22 The aveage cellula peetatio ate at the ed of 2002 was 25.4%. I the shot time spa sice s oductio, mobile telephoy has supassed fixed telephoy i may of these couties. Fo compaiso, the aveage fixed lie peetatio ate at the ed of 2002 was oly 2.9%. Thee is howeve a wide discepacy i cellula peetatio levels. Most fome Soviet Uio Republics had cellula peetatio levels smalle tha 0%, compaed to almost 85% i the leadig couty, the Czech Republic. 20 Sloveia was the oly fome socialist couty to be classified i the high-icome categoy by the Iteatioal Telecommuicatios Uio duig this peiod. 2 The legth of the waig list is affected posively by umet demad, ad egatively by the fustatio of joiig a walist whout hope of eceivig sevice. Ideally, oe would also like to accout fo the effect of the aveage waig time fo the istallatio of a fixed lie o cellula peetatio. Howeve, data o aveage waig time is scace. 22 addioal measue of couties polical istabily poved isigificat i the estimatios. The measue is the polical costa vaiable POLCON V costucted by Heisz 2000 o the basis of a spatial model of polical eactio. 26
O the assumptio that mobile commuicatios is a omal good, couties wh highe pe capa icome should have a highe iial level of cellula peetatio, othe thigs eual. I theoy, fixed lie peetatio may have a posive o a egative effect o fixed etwok expasio, depedig whethe adoptes view mobile commuicatios as a complemet o a substute fo fixed commuicatios. The telecommuicatios maket i socialist couties has log bee chaacteized by sigificat excess demad fo fixed lies. The suatio pesisted eve afte the fall of commuism, as buildig commuicatios ifastuctue euied time ad a cosideable amout of ivestmet. Low ad ubalaced taiffs that favoed esidetial customes aggavated the poblem of excess demad fo wielie sevices. Oe would expect couties wh a highe factio of people waig fo the istallatio of a fixed lie to adopt cellula techology faste. Seveal couties stated adoptig cellula techology duig the aalog ea, befoe the advet of digal mobile commuicatios. Digal techology bought a shap icease i capacy ad i the umbe of cellula subscibes. I use a dummy vaiable NLOG to accout fo the possible diffeeces i the level ad speed of adoptio betwee the two techologies. addioal dummy vaiable SINGLE_D accouts fo the possibily that couties which oly adopted the digal techology may have a diffeet level ad speed of adoptio tha couties which stated wh aalog techology. Tests of estictio 2-7 o these vaiables ejected the hypothesis of o discotiuy. ll fome socialist couties i Easte Euope ad Cetal sia oduced competio i digal mobile commuicatios by the ed of 2002, wh the exceptio of meia, Macedoia 27
ad Tukmeista. Table 2- shows the umbe of digal cellula opeatos i each couty, ad the yeas whe these opeatos eteed the maket. 23 Moopolists typically fid pofable to aise pices ad estict output. The oductio of competio may lead to lowe pices, iceased demad fo mobile sevices, ad faste adoptio of cellula techology. ut competig fims might also collude ad keep pices high. Thee is ample theoetical leatue that stesses the ole ecoectio chages play i facilatig collusio betwee competig etwoks see mstog [998], Laffot, Rey, ad Tiole [998a, b] fo example. I the exteme case the pice fims chage could be the moopoly pice. Moe fims may also have moe esouces available fo ivestmet. ut moe esouces do ot ecessay mea moe ivestmet. ecause of demad ucetay, competig fims might fee ide o each othe s ifomatio gatheig, ad thus might wa a elatively log time to ivest mstog ad Vickes [996]. Whethe competio leads to faste cellula techology adoptio o ot is theefoe a empiical uestio. Pake ad Rölle [997] fid that duopolies i US mobile commuicatios makets behaved much less competively tha expected. Gube ad Vebove [200a, b] ad Gube [200] fid that the oductio of competio had a posive effect o the speed of adoptio of cellula techology. I use thee vaiables to captue the effect of competio o mobile commuicatios diffusio: a dummy vaiable fo the oductio of digal commuicatios competio COMPD, ad two othe dummy vaiables that make possible to compae the elative effect of oducig competio simultaeously SIMULTNEOUS vesus seuetially 23 The dates of ety eflect actual lauch dates fo the povisio of sevices, athe tha dates whe liceses wee awaded. Ety dates, as well as the umbe of subscibes of each compay, wee collected by the autho fom vaious issues of the Global Mobile ad Global Wieless publicatios. 28
SEQUENTIL. Tests of estictio 2-7 could ot eject the hypothesis of o discotiuy fo ay of the competio vaiables. aalysis of the pattes of ety i fome socialist couties eveals that iche couties ad moe populous couties oduced competio ealie tha smalle, pooe couties. Low iial demad fo mobile commuicatios i pooe ad less populous couties did ot allow moe tha oe pofable fim i the maket. Riche ad moe populous couties also teded to oduce competio simultaeously. It is impotat, theefoe, to accout fo the edogeey of such decisios, ad see if the effect of competio vaiables emais posive ad sigificat whe accoutig fo self-selectio o behalf of these couties. I estimate the model usig istumetal vaiables, afte addig a mea zeo eo tem to Euatio 2-0. 24 sigificat cotibutio of this pape is the use of a caefully costucted set of istumets specific fo tasio couties, icludig vaiables such as govemet expedue as a factio of GDP, ad the factio of bak assets held by state-owed baks. Details about the estimatig pocedue, data souces, the istumets used, ad the atioale fo usig them ae give i the appedix. Estimatio Results The esults fom estimatios i which the fou goups of couties wee allowed to have diffeet factios of potetial adoptes ae peseted i Table 2-3. The esults wee vey simila whe all goups wee assumed to have the same factio of potetial adoptes. They ae peseted i Table 2-4. The obustess of the esults wh espect to diffeet assumptios 24 Gube ad Vebove [200a, b], ad Gube [200] estimated thei models usig oliea least suaes. Howeve, the umbe of mai lies pe capa ad the factio of people o a waig list ae edogeous to cellula peetatio. Futhemoe, the oductio ad type of competio also appea to have bee edogeous decisios. Hausma test ejected the ull hypothesis of exogeey of these vaiables at % level of sigificace. 29
egadig the total umbe of potetial adoptes is comfotig ad helps validate the teatmet of the factios of potetial adoptes as kow paametes. The fist two colums i Table 2-3 peset esults i which mailies pe capa, the waig list, as well as all competio vaiables, wee istumeted. s expected, couties wh a highe level of icome pe capa had highe iial adoptio levels, all othe thigs eual. Howeve, thei advatage seems to dimiish ove time, pobably because of deceasig pices of mobile sevices. These fidigs ae i cotast wh those of Gube [200] who foud o effect of eal GDP pe capa o cellula peetatio ates i 0 tasio couties, but ae i accodace wh the esults of Gube ad Vebove [200a, b]. Couties wh highe wielie peetatio had fewe mobile subscibes pe capa iially, but had highe subseuet gowth. 25 This fidig may eflect the fact that fome socialist couties wee elatively poo i the ealy 990s, ad most people who owed a fixed lie did ot acuie mobile sevices. s pices declied, pehaps dive by supply iceases due to lowe costs ad iceased ivaly betwee the two techologies, moe people stated buyig mobile sevices. lteatively, the highe ate of gowth could be the esult of posive diect etwok effects betwee techologies. May customes i these couties bought pepaid phoe cads ad used mobile phoes oly as a meas of beig cotacted, athe tha to make calls. Most people who adopted cellula techology did ot give up thei fixed lies due to high taiffs fo mobile-to-fixed ad fixed-to-mobile calls. The elative povety of these couties could also explai the lowe iial level of adoptio i couties wh a highe factio of the populatio waig fo fixed lies. Geeally, people 25 This fidig is cotay to that of Gube ad Vebove 200b, who fid that couties wh highe fixed lie peetatio also had a highe iial factio of cellula subscibes. Howeve, the diffeece i esults is ot due to the diffeece i estimatig techiues betwee the two studies. I the peset study, least suaes dummy vaiables estimatio poduced the same ualative esults as istumetal vaiables. 30
waig fo mai lies had modest o ltle icome. 26 These people could ot affod a mobile phoe iially. Howeve, as pices deceased, these people stated to buy cellula phoes, ad couties wh moe people o waig lists expeieced elatively apid gowth i mobile adoptio. I cotast wh Gube [200], but i accodace wh Gube ad Vebove [200a, b], I fid that techological factos had a impotat impact o mobile techology diffusio. The level of adoptio was sigificatly lowe duig the aalog ea due to capacy costas ad elatively high pices. Couties that stated adoptig cellula commuicatios oly duig the digal ea had lowe iial levels of adoptio elative to couties that stated the adoptio wh aalog techology. Howeve, they also expeieced highe levels of gowth, as people who valued mobile commuicatios highly, ad would have bought the sevices had they bee available duig the aalog ea, bought the sevices whe digal mobile commuicatios wee oduced. The oductio of competio iceased the speed of adoptio of cellula techology. The effect is sigificat eve afte accoutig fo the edogeey of competio vaiables. 27 The effect was paticulaly poouced whe competio was oduced seuetially. 28 The geate impact of seuetial competio could eflect the fact that couties which oduced competio seuetially ofte oduced competio late tha couties which oduced 26 ibes wee ot ucommo i these couties. Rich o ifluet people did ot have to wa i lie fo a coectio. 27 s metioed peviously, cellula pices ae abset fom the estimatios, as data o cellula pices i these couties is vey scace. Nevetheless, pices of mobile phoes ad mobile calls have declied thoughout the 990s. To the extet that pice deceases ae due to competio, the absece of pices fom estimatios does ot lead to biased coefficiets. Howeve, if pice deceases ae also due to othe omted factos, the coefficiets of competio vaiables ae oveestimated. The use of fixed effects helps educe the possible bias due to omted vaiables. 28 The coefficiets o seuetial ad simultaeous competio i Table I ae statistically diffeet at 5% level of sigificace. 3
competio simultaeously. To the extet thee is a catchig up effect caused by techological pogess, deceases i the cost of mobile sevices, o eatioal leaig, would be eflected i the diffeece betwee the effect of seuetial ety ad that of simultaeous ety. othe possibily is that wh seuetial ety the ew competo has to pice moe aggessively to establish self i the maket. t test based o the Hefidahl idex of maket cocetatio 29, 30 evealed that seuetial ety led ideed to highe idusty cocetatio at the ed of 2002. The thid ad fouth colums i Table 2-3 peset esults of estimatios i which competio vaiables wee teated as if they wee exogeous. The compaiso wh the coespodig esults i the fist two colums shows the impotace of accoutig fo selfselectio o behalf of couties. The coefficiets fom the istumeted specificatios ae smalle. The diffeece betwee the coefficiets o simultaeous competio is sigificatly diffeet fom zeo at 5% level of sigificace, ad so is the diffeece betwee the coefficiets o seuetial competio obtaied fom the two estimatios. The diffeece betwee the coefficiets o competio fom colums ad 3 is sigificat at 0%. These diffeeces taslate o sizeable diffeeces i pedicted adoptio levels, as is evidet fom the esults i Table 2-5. Simulatio esults i Table 2-5 wee computed usig the specificatios i Table 2-4 colums 2 ad 4, ad ae based o aveage ad stadad deviatio values of vaiables fo the 29 Collusio is easie achieved whe the competig etwoks ae of simila size Laffot, Rey ad Tiole [998a, b], that is, whe the Hefidahl Idex is smalle fo a give umbe of competos. The aveage value of the Hefidahl idex at the ed of 2002 was 450 fo couties that oduced competio simultaeously, ad 5600 fo couties that oduced competio seuetially. The diffeece is statistically sigificat at % level of sigificace. 30 The Hefidahl idex was employed i alteative specificatios of the diffusio model istead of the competio vaiables descibed above. The coefficiet o the Hefidahl idex vaiable tued out to be magially isigificat. This is due to the eductio i sample size caused by missig values i the umbe of subscibes of each telecommuicatios opeato. 32
yea 2002. ll couties ae assumed to have the same maket potetial of 59%. 3 The aveage couty was cosideed to be a membe of the thid goup of couties, the alkas, fo the puposes of these simulatios. The last two colums peset the effect of sepaate chages i each vaiable. 32 The pedicted effect of seuetial competio is the total effect o the cellula peetatio level at the ed of 2002, assumig that competio was oduced seuetially i 999. The pedicted effect of simultaeous competio is the total effect o the cellula peetatio level at the ed of 2002 esultig fom the oductio of two o moe digal opeatos i 996. The esults illustate the tadeoff betwee oducig digal competio simultaeously vesus seuetially. Seuetial competio atually occued late tha simultaeous competio, but the catchig-up effect due to the highe coefficiet of seuetial competio meat that by 2002 the effects of the two types of ety wee vey simila. Table 2-5 also demostates the impotace of accoutig fo the edogeey of policy decisios. Whe the edogeey of competio policy is ot accouted fo, the model pedicts thee would be 23 to 24 moe cellula subscibes pe 00 idividuals as a esult of seuetial competio, ad 20 to 2 moe cellula subscibes as a esult of simultaeous competio. I cotast, the coespodig iceases whe accoutig fo the edogeey of policy decisios ae oly 9 ad 8 subscibes pe 00 idividuals, espectively. 3 This value, obtaied by costaiig all couties to have the same maket potetial, is close to the value of 62% obtaied by Gube ad Vebove [200a] fo the Euopea Uio membe couties. The value obtaied by Gube [200] fo 0 out of these 9 couties was 7%. 32 The total effect o cellula peetatio fom chagig moe vaiables at the same time does ot eual the sum of the effects of sepaate chages i each vaiable due to the oliea fuctioal fom. The egative effect of a oe stadad eo icease i GDP pe capa does ot ecessaily mea that iche couties will have lowe peetatio levels tha pooe oes. Riche couties geeally also have highe levels of fixed lie peetatio, which is associated wh educed mobile adoptio. highe GDP pe capa has a posive effect o cellula peetatio ates oughly though 2000, afte which the effect becomes egative. 33
Coclusio I have aalyzed the detemiats of mobile commuicatios adoptio i the fome socialist couties fom Easte Euope ad Cetal sia. The socioecoomic chaacteistics of these couties played a impotat ole i detemiig the level ad speed of mobile commuicatios diffusio. s expected, couties wh a highe level of eal pe capa icome had highe iial levels of cellula peetatio, although thei advatage dimiished ove time. Couties wh a highe umbe of fixed lies pe capa ad couties wh highe waig lists fo fixed lies expeieced lowe iial levels of cellula adoptio, but highe subseuet gowth. Techological factos had a impotat impact o mobile techology diffusio. The level of adoptio was sigificatly lowe duig the aalog ea due to capacy costas ad elatively high pices. The oductio of competio led to a substatial acceleatio i the speed of adoptio of cellula commuicatios. Futhemoe, ad pehaps moe supisigly, seuetial competio led to highe gowth i the umbe of subscibes tha simultaeous competio. Thus, thee appeas to be a catchig up effect of seuetial competio, compesatig fo the fact that seuetial ety atually occus late tha simultaeous ety. This eseach also demostates the impotace of accoutig fo the edogeey of key policy decisios, such as the timig of the oductio of competio. Failue to accout fo this edogeey leads to upwad biased estimates of the effect of competio o cellula adoptio ates. The goupig of couties eflects both histoical ad geogaphical cosideatios i ode to miimize the heteogeey betwee goup membes. fist divisio is that betwee fome Soviet Uio epublics ad the othe fome socialist couties. This divisio eflects the 34
commo histoy of the fome Soviet Uio Republics, ad the fact that most of the epublics ae still i the sphee of ifluece of the Russia Fedeatio. mog fome Soviet Uio Republics, the altic States have slightly diffeet cultual ad histoical backgoud. They ae close i this espect to the fome socialist couties that wee ot pat of the Soviet Uio. The altic States ae also the oly fome Soviet Uio couties that have joied the Euopea Uio. Couties that wee ot membes of the Soviet Uio wee futhe divided o those i Cetal Euope, ad those i the alka Peisula. This is ot oly a geogaphical divisio. It also eflects the fact that couties i the alka Peisula wee fo a log peiod of time ude the occupatio of the Ottoma Empie, while the othe couties wee at least patially ude usto-hugaia occupatio. The two empies left thei mak ot oly o the cultue, but also o the ecoomic istutios of these couties. 35
36 Table 2-. Numbe of digal mobile opeatos alog sice Couty ame Goup 994 995 996 997 998 999 2000 200 2002 lbaia alka * 2 meia CIS * 994 zebaija CIS * 2 993* ulgaia alka 2 osia ad 2 3* Hezegovia a CE 993* elaus a CIS * 2 99 Czech Republic CE 2* 3 99* Estoia altic 2 3* Geogia CIS 2 990* Coatia CE * 2 990 Hugay CE 2* 3 994 Kazakhsta CIS 2* 3 Kygyzsta CIS * 2 992* Lhuaia altic 2* 3 992* Latvia altic * 2 995* Moldova CIS * 2 3 Macedoia a alka * 992* Polad CE 2 3* 993* Romaia CE 2 3* 4 99 Russia a CIS 99* Slovakia CE 2* 3 996* Tajikista a CIS 2 Tukmeista a CIS 993* Ukaie CIS 4* 5 993 Uzbekista CIS 2* 5 Yugoslavia a alka * idicates ety by the icumbet fixed lie opeato o the mobile maket. a idicates that the couty is ot pat of estimatios.