Innovative pricing: a case of pricing for profits on the mobile internet

Andreas Jonason and Bo Holma

International Journal of Information Technology and Management, 2004, vol. 3, issue 1, 105-115

Abstract: Innovative pricing addresses the pricing challenge faced by mobile operators as a result of the transition from the second to the third generation of mobile telephony. A central issue in the success of this new technology is the charging structure towards end-users. Pricing new services too high will result in a low take-up rate of the service, whereas pricing the service too low could result in low and unsatisfactory revenues. This study presents the results of a consumer study in the UK consisting of a sample of 2000 interviews with potential end-users of third-generation services. The principal conclusion is that the previously accepted price-optimisation theory of charging per megabyte is insufficient for the introduction of wireless broadband services. This opens up a considerably broader and more complex pricing problem that requires a completely different set of theoretical tools and involves a considerable element of innovation in how the price is set.

Keywords: innovative pricing; price elasticity; consumer behaviour; telecommunications; pricing; wireless broadband; mobile communications. (search for similar items in EconPapers)
Date: 2004
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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijitma:v:3:y:2004:i:1:p:105-115

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