Co-Diffusion of Mobile Operator's OTT and SMS Messaging Services in Emerging Economies

Yan Yu, Jin-Xing Hao, Meiyun Zuo, Siqing Shan, J. Christopher Westland

Abstract: Description The debate about the relationship between the Over the Top (OTT) messaging service and the Short Message Service (SMS) has received intensive attention in emerging economies. In this study we attempt to explore the diffusion and co-diffusion processes of OTT and SMS messaging services that are integrated in one product, in particular China Mobile Fetion. We employ the niche theory and media synchronicity theory as foundations for the development and explanation of diffusion-based hypotheses. We adapt an extended Bass model to inscribe the dynamics of the service co-diffusion and use the empirical data of Fetion to test the hypotheses. Our results show that Fetion OTT messaging service diffuses much faster than Fetion SMS messaging service. More importantly, our analysis reveals the complementary relationship between the two Fetion messaging services in its early stage of diffusion, which contradicts to wide-held substitutive standpoint. Plausible reasons and implications of this study are discussed.