Estimating the potential increase in consumer welfare from the introduction of Super Wi-Fi services in Korea

Abstract

With the increasing use of smart devices recently, mobile traffic has been increasing rapidly, which in turn has resulted in greater demand for frequency. Many countries have attempted to use the vacant frequencies known as television white space in an effort to solve the frequency problem. Super Wi-Fi, a wireless Internet service based on television white space, is one of the ways television white space is being utilized. This paper applies conjoint analysis to evaluate consumers' willingness to pay for each of the attributes of a Super Wi-Fi service and estimates by how much consumer welfare could be increased by the introduction of a Super Wi-Fi service. The attributes of a Super Wi-Fi service are coverage, a reduction in communication expenses when using mobile data, the ability to use multiple screens, and a wide range of Wi-Fi service providers. The results based on user surveys indicated that the marginal willingness to pay per month for a Super Wi-Fi service is KRW 4717 (USD$4.6). Moreover, marginal willingness to pay in nonurban areas for this service is greater than that in urban areas, which implies that the introduction of a Super Wi-Fi service is expected to increase consumer welfare, especially in nonurban areas. (C) 2015 Elsevier Ltd. All rights reserved.