Virtual Enterprises, Mobile Markets and Volatile Customers

Ferdinand Jaspers, Willem Hulsink and Myrte Theeuwes

ERIM Report Series Research in Management from Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam

Abstract: Recently, several new mobile virtual network operators (MVNOs) have entered the European mobile telecommunications markets. These service providers do not own a mobile network, but instead they buy capacity from other companies. Because these virtual operators do not possess an infrastructure of their own, they have signed contracts with incumbent mobile operators with a network. The growth of these MVNOs which use leased network capacity from existing carriers, presents the incumbent mobile operators with a strategic dilemma. Network-based mobile operators have almost full control over their infrastructure but they may not know their customers well enough to fill the demand for cheaper and/or innovative services. New service-based operators may create affinity with the customer and introduce quickly all kinds of innovations and/or price discounts, but they still have to negotiate access terms and conditions with one of the domestic network-based operators. It has become important, and in some countries even urgent, to introduce regulatory measures concerning non-discriminatory access to the mobile telecommunications sector. This paper looks furthermore deeper into the entry and innovation strategies by MVNOs on the mobile market in the Netherlands, and its impact on competition.

Keywords: David & Goliath competition; MVNO (Mobile Virtual Network Operators); entry & innovation strategies; unbundling value chain; virtual enterprise (search for similar items in EconPapers)
JEL-codes: L96 M M13 O32 (search for similar items in EconPapers)
Date: 2005-06-28
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