Consumer Broadband Choices: Smartphone and Digital Entertainment Growth in E-Commerce
Youngsoo Kim and Robert J. Kauffman
International Journal of Electronic Commerce,
Volume 29, Number 3, 2025, pp. 366-400.
Abstract:
Mobile phone services have become increasingly important in e-commerce as digital entertainment is increasingly delivered via mobile devices. The telecommunication industry has sought to understand the interaction between demand for different broadband services, as mobile digital entertainment depends on increasing service bandwidth. We collected data on fixed broadband (FB) and mobile broadband (MB) for 132,004 customers over 5 years (2009–2014) in Singapore, coinciding with the introduction of smartphones to the market. We examine the cross-effects between FB and MB services by tracking customers’ bandwidth changes in the growth of digital entertainment. We found evidence for both complementarities and substitution between FB and MB bandwidths. Specifically, an increase in FB bandwidth led to an increase in MB bandwidth (a complementary effect), while a decrease in FB bandwidth resulted in an increase in MB bandwidth (a substitution effect). We also observed that smartphone adoption had different short-term and long-term impacts on broadband services, especially as mobile Internet services surged due to innovations in e-commerce. For managerial implementation of our findings, we performed numerical analyses to predict the average revenue per user (ARPU) changes and assess potential bundling strategies. In addition, we conducted qualitative comparison of broadband services and mobile digital entertainment trends during the past 15 years, both within national settings and globally. Our findings provide a fundamental basis for customer segmentation and bundle pricing strategies for telecommunication service providers, particularly in supporting the expansion of digital entertainment services.