Performance Implications of Outsourcing in the Mobile Telecommunications Industry

28 Pages Posted: 2 Feb 2012

See all articles by Jörg Claussen

Jörg Claussen

Ludwig Maximilian University of Munich - Faculty of Business Administration (Munich School of Management); Copenhagen Business School - Department of Innovation and Organizational Economics

Tobias Kretschmer

Ludwig Maximilian University of Munich - Faculty of Business Administration (Munich School of Management); Centre for Economic Policy Research (CEPR)

Daniel Oehling

Ludwig Maximilian University of Munich; London School of Economics & Political Science (LSE)

Date Written: February 1, 2012

Abstract

We examine how outsourcing of a core service affects firm performance in the context of the mobile telephony industry. We develop hypotheses based on economies of scale, transaction costs, quality advantages from specialization, and bargaining power and test these using a ten-year panel with 50 mobile network operators outsourcing their network operations. We find that operators can decrease costs, increase revenues and improve their profitability in the long run by outsourcing mobile network operation services. This effect is stronger for small than for big operators.

Keywords: outsourcing, vertical firm boundaries, mobile telecommunications industry

Suggested Citation

Claussen, Jörg and Kretschmer, Tobias and Oehling, Daniel, Performance Implications of Outsourcing in the Mobile Telecommunications Industry (February 1, 2012). Available at SSRN: https://ssrn.com/abstract=1997390 or http://dx.doi.org/10.2139/ssrn.1997390

Jörg Claussen (Contact Author)

Ludwig Maximilian University of Munich - Faculty of Business Administration (Munich School of Management) ( email )

Kaulbachstr. 45
Munich, DE 80539
Germany

Copenhagen Business School - Department of Innovation and Organizational Economics ( email )

Kilevej 14A
Frederiksberg, 2000
Denmark

Tobias Kretschmer

Ludwig Maximilian University of Munich - Faculty of Business Administration (Munich School of Management) ( email )

Kaulbachstr. 45
Munich, DE 80539
Germany

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Daniel Oehling

Ludwig Maximilian University of Munich ( email )

Schackstr. 4
Munich, 80539
Germany

HOME PAGE: http://www.en.isto.bwl.uni-muenchen.de/team/mitarbeiter/oehling

London School of Economics & Political Science (LSE) ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

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