(The) effectiveness of zero-rating strategy on mobile application usage

Abstract

With the advent of network technology, the Internet became available in mobile devices and developed as the time goes on. Over the generation of evolving network technology, our dependence on data in the mobile device has also been increased. Under the circumstances, increasing network traffic can activate discussion about new standards of network neutrality. One possible experience that mobile consumers can experience is zero-rating strategy. In this study, with the perspective of zero-rating strategy as a promotion, we looked into the effect of zero-rating promotion during the promotion and beyond. Based on our econometric finding shown in difference-in-difference analysis, zero-rating strategy toward customers showed positive and significant effect during the promotion period. Furthermore, even when the incentive period ended, induced mobile app usage persisted in the post-promotion period. Through this study, we could contribute to the literature of habitual formation induced by the incentive in a newly discussed context, a data usage fee promotion for the mobile app usage.