Mobile phones are increasingly used as a gateway to the Internet. The take-up of mobile phone-enabled Internet services was, however, initially slower than expected, at least in Europe. This paper estimates non-parametrically the price elasticities of demand for first-generation wireless services using consumer-level panel data from a real world pricing experiment and the restrictions of a structural model. The paper decomposes the number of wireless connections into the number of needs and the conditional probability of establishing a connection, given a need. According to the estimates needs were plenty, but the conditional usage probability small. Demand for first-generation wireless services was highly elastic and the welfare gains to an (early) adopter moderate.
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