Determinants of fixed and mobile broadband demand in Mexico using discrete choice exercises and logit and conditional logit models

Abstract

We utilize stated preference data from discrete choice exercises administered to 15,000 households and individuals in Mexico and estimate logit and conditional logit models to identify determinants of fixed and mobile broadband demand. We find that the service attribute most consistently important for broadband demand, apart from price, was service reliability and find that urban customers are willing to pay more for reliable fixed broadband service, but rural customers are willing to pay more for reliable mobile broadband service. We find evidence that rural customers are more price sensitive compared to urban customers for mobile broadband but not for fixed broadband. We find evidence that fixed and mobile broadband services are complements and that speaking an indigenous language results in a higher likelihood of subscription for both fixed and mobile broadband as does greater daily internet usage. We do not find evidence that equipment subsidies are associated with greater likelihood of subscription.