System dynamics integrative modeling in the diffusion dynamics of Indian telecom sector:

Abstract

In recent times, India has emerged as one of the fastest growing telecom markets in the world and witnessed a telecommunication revolution brought about by a collaboration of government, industry, and the scientific community. From a situation where an applicant had to wait three years to obtain a telephone connection to a position where telephone companies are wooing consumers, it has been a success of indigenous technology development and effective diffusion management.  Derived from the insight gained in the course of literature research and interaction with industry experts, in this paper, a system dynamics integrated model of Indian telecommunication sector (Mobile Telephony) has been calibrated to demonstrate the nature of interactions among system variables and the resultant outcome which assume degrees of importance at different stages of the diffusion/adoption process in the Indian telecom sector. From a supply chain perspective, the study has encompassed system modeling of the entire 'supply-line' of Telecom diffusion i.e. Supply-side dynamics (R&D, Infrastructure, Production & Promotion), Adoption-dynamics (Potential Adopters, Rate of Adoption and Number of Adopters) and Market-side dynamics (Subscription demand, Revenue and Profitability) The work done here proves how the application of system dynamics modeling and simulation can contribute in a meaningful way to improve the holistic understanding of the dynamic structural complexities and forces driving and arising from the supply line of telecom diffusion. Several model simulations show the potential of using system dynamics as a promising modeling approach to capture, integrate and predict the structural behavior of innovation diffusion process. In the end, a novel interface of neural net has been explored to perform sensitivity analysis and a scenario projection of multiple usage situations has also been conducted.