A logit analysis of telecommunication network bypass decisions

This paper is concerned with the growing trend for business and institutional users of telecommunication services to bypass public telephone networks by installing private facilities made available by recent technological advances. The factors leading to bypass decisions are determined, using discrete choice logit models estimated with data gathered in a specifically designed large survey of manufacturers and financial institutions. The results clearly show that the larger the firm in terms of numbers of employees and locations and in terms of telecommunication activity, the higher is the likelihood of that firm to engage in bypass. The forecasting applicability of the models is also outlined.