Virtual Enterprises, Mobile Markets and Volatile Customers

31 Pages Posted: 21 Dec 2005

See all articles by Ferdinand Jaspers

Ferdinand Jaspers

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM)

Willem Hulsink

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM)

J. J. M. Theeuwes

University of Amsterdam - Faculty of Economics and Business (FEB)

Date Written: June 28, 2005

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, entry & innovation strategies, unbundling value chain, MVNO (Mobile Virtual Network Operators), virtual enterprise

JEL Classification: M, M13, O32, L96

Suggested Citation

Jaspers, Ferdinand and Hulsink, Willem and Theeuwes, J. J. M., Virtual Enterprises, Mobile Markets and Volatile Customers (June 28, 2005). ERIM Report Series Reference No. ERS-2005-039-ORG, Available at SSRN: https://ssrn.com/abstract=800220

Ferdinand Jaspers (Contact Author)

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM) ( email )

P.O. Box 1738
Room T08-21
3000 DR Rotterdam, 3000 DR
Netherlands
31 10 4082299 (Phone)

Willem Hulsink

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM) ( email )

P.O. Box 1738
Room T08-21
3000 DR Rotterdam, 3000 DR
Netherlands

J. J. M. Theeuwes

University of Amsterdam - Faculty of Economics and Business (FEB) ( email )

Roetersstraat 11
Amsterdam, 1018 WB
Netherlands

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