International Journal of Forecasting ( ) – Contents lists available at ScienceDirect International Journal of Forecasting journal homepage: www.elsevier.com/locate/ijforecast The diffusion of mobile social networking: Exploring adoption externalities in four G7 countries Miriam Scaglione a , Emanuele Giovannetti b,c , Mohsen Hamoudia d,* a University of Applied Sciences and Arts Western Switzerland Valais, School of Management and Tourism, Switzerland b Institute for International Management Practice, Anglia Ruskin University, UK c DSE University of Verona, Italy d Orange – France Telecom Group, France article info Keywords: Social networking Diffusion models and innovation Bass model Heterogeneity of adoption Gamma/shifted Gompertz model ICT and social forecasting abstract The diffusion of Mobile Social Networking (MSN) is driven by the development of new devices and improved mobile broadband. The instantaneous nature of MSN exchanges enhances the value of data access for mobile users, which generates network externalities. We explore the presence of these externalities in the diffusion of MSN in France, the UK, the US and Germany. For these countries, we compare estimates of two diffusion models: the Bass model and the Bemmaor model. We find evidence of network externalities in MSN adoption for all of these countries, captured by the left skew of the cumulative adoption curves. This evidence is confirmed even after taking into account the contrasting effect of heterogeneity in the propensity to adopt. Our results provide content providers, operators and regulators with insights about marketing strategies, helping with policy formulation under the combined presence of network externalities and heterogeneity. © 2015 International Institute of Forecasters. Published by Elsevier B.V. All rights reserved. 1. Introduction Over the last thirty years, the telecommunications in- dustry has grown in both size and complexity, due mostly to the sector convergence of different applications, mar- ket deregulation and the penetration of the Internet. Prior to these transformations, the value chain of telecommu- nications providers (telcos) was characterised by a supply chain that was articulated into the sequence of: pro- curement, network operations, network-related service provisioning, billing, and added-value services and sales. Since 2007, however, the profitability associated with voice services has declined dramatically (West & Mace, 2010). Moreover, newcomers, defined as ‘‘over the top’’ * Corresponding author. E-mail address: mohsen.hamoudia@orange.fr (M. Hamoudia). companies (OTT), have progressively taken advantage of the standard IP-based Internet connection by adding new services. Accordingly, infrastructure and services have progressively become independent (Grove & Baumann, 2012, p. 40). One such example is Skype, which was able to lower call rates by combining Internet IP tele- phony with traditional telephony and reaping the associ- ated economies of scale. Despite renewed efforts by telcos to provide IPTV and TV via telephone lines, OTT services (e.g., YouTube or Netflix) have emerged as more success- ful. 1 These sector changes mean that telcos’ products are progressively losing value by being commoditised (Funk, 1 Moreover, the telcos’ development of Internet-based applications has been slower in Western countries than in the Far Eastern ones. Funk (2007) identified the main causes of this as being related to differences in both the underlying architecture and priorities, with western companies focussing mainly on business users. http://dx.doi.org/10.1016/j.ijforecast.2015.03.005 0169-2070/© 2015 International Institute of Forecasters. Published by Elsevier B.V. All rights reserved.