The development of telecommunication in Turkey and ARDL approach analysis of demand

Nowadays, telecommunication services have become an essential part of both social and business life. Developments in telecommunications is one of the reasons for the acceleration of globalization. But globalization has increased the demand of telecommunications. After 1980's the telecommunications sector has liberalized with changing in the laws and regulations and the market was opened to competition. Thus, this has affected the demand for fixed-line. With this study firstly the historical development of sector is examined, then the study mainly aimed at the econometric model calculations of price, income and cross price elasticity in short and long term of the fixed line telecomunication demand between 2009 – 2015. Telecomunications history and development is looked into in the first section, the elasticities are explained in the second and the third section includes an emprical analysis. A demand function for TT fixed line was created in the study and to research this demand models short and long term relations, Bound Test approach which was developed by Peseran et al. (2001),was used. Then, the study applies CUSUM and determinationtests of recursive coefficient to the Bound Test.Test results show that the estimated variables are stable in the long term. The most important result of the research is; the price elasticity of fix lined service has contradicting outcome to the expectation. Statistically the fundamental variable is mobile service prices and fixed line and mobile services are complemantary goods to one another. Also, as the income rises, it is observes that the demand for mobile services shifted to mobil communication which requires more technology increase. Keywords: Telecommunication, Telecommunication demand, Elasticiy, Cointegration,Autoregressivedistributedlag (ARDL)