Abstract
A large proportion of the world telecommunications market can be characterized as supply restricted. In ITU (1999) official waiting lists numbered about 50 million worldwide with an average waiting time of two years. More than 100 countries had not eliminated the waiting list for telephone connections and hence a supply restricted market prevailed in all of these countries. Only about 25 countries have succeeded in eradicating their waiting list for basic telephone service. In terms of the pattern of diffusion, the subscriber's flow from waiting applicants to adopters is controlled by supply restrictions adding an important dimension that needs to be addressed when modeling and forecasting demand. An empirical analysis of the diffusion of main telephones in 46 supplyβrestricted countries is presented to demonstrate the usefulness of a threeβstage Bass model that has been proposed to capture the dynamics of supply restrictions. We also compare the forecasting ability of different approaches to estimation when panel data are available. Copyright Β© 2001 John Wiley & Sons, Ltd.