Estimation of the Network Externality Coefficient of Land Phone in Iran

Land- phone, like mobile, internet and fax is a communication device and has network externality effect. Thus as the penetration coefficient increases, the network effect improves. The transmission of information via the word of mouth is the main source of enhancing the network externalities coefficient. In this article we have investigated the factors affecting the network externality coefficient.
The results show the effects of technical as well as the economical factors on this coefficient. The network externality coefficient is low; but since the shape of S curve diffusion of technology has not yet been completed, the expansion of land- phone network due to demand curve has a main role in the people's willingness to pay for the service of land- phone.
JEL Classification: L96