Modeling consumer behavior in the cellular service market

<p>Telecommunication aspect tends to be of high current interest. In most countries, mobile telephones have grown to be a central part of the telecommunication network - mobile penetration rates exceed fixed line penetration rates in all regions of the world, and by a margin of three to four times in some regions (Miravete, 2002).</p><p>Despite tremendous growth in mobile voice and data services, our understanding of how users consume these services is still limited, especially in Russia.</p><p>Wireless communication tariffs are designed in different ways. Although, these price schemes are intuitive to describe, modeling and empirical estimation of demand parameters under a nonlinear price structure are nontrivial.</p><p>The question is: Why do people choose one or another tariff? By what tariff characteristics are they primarily guided? Is there any influence of people mobility? Such questions are really popular among company&rsquo;s managers and consumers.</p><p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; That&rsquo;s why the main objective of this research is to attempt to wide our understanding of the cellular service consumption principals.</p><p>The data is collected and provide by Rostelecom company, and includes information about tariffs and users. We have access to individual level consumption data for cellular service (number of calls and SMS, price, duration of every call, place of use), which allows us to build a model and draw useful conclusions.</p>