Deutsche Bank Research Economics Working Paper No. 42
11 Pages Posted: 27 May 2004
Date Written: January 15, 2004
The current problems in mobile telephony are leading critics to make overly pessimistic predictions that 3G - the third-generation mobile phone system - will never become profitable. However, the resulting calls not to introduce 3G and instead directly back alternative wireless technologies (e.g. WLAN) are a step too far. Ultimately, a profit-oriented service can only create significant value-added with a mix of both 3G and WLAN technologies. It is notable that no attractive broadband-dependent applications have emerged as yet. The typical user is only interested in the value-added the application provides, not the underlying wireless technology. Although mobile telephony remains one of the most dynamic areas of the economy, euphoria is misplaced. Advanced wireless technologies will on no account become profitable before the start of the next decade. But even that is not a given; this will challenge the entrepreneurial spirit of network operators, mobile terminal manufacturers and service providers alike.
Keywords: Communication technology, mobile telephony
JEL Classification: K2, L96, O14, O33
Suggested Citation: Suggested Citation
Heng, Stefan, Mobile Telephony - Cooperation and Value-added are Key to Further Success (January 15, 2004). Deutsche Bank Research Economics Working Paper No. 42. Available at SSRN: https://ssrn.com/abstract=550681 or http://dx.doi.org/10.2139/ssrn.550681