Forecasting the success of telecommunication services in the presence of network effects

Historical examples (ISDN, Teletex, telefax, telex) show us that forecasting efforts in the telecommunication sector can go awry - not only by a few percentage points but by large magnitudes. We maintain that with strong network effects it is not possible to forecast the success of telecommunication services with a high degree of confidence. This paper reviews the role played by network effects for the adoption of telecommunication services, which lead to diffusion phenomena including critical mass, lock-in, path dependency, and inefficiency. (...)