Application Customization, Profit Zones, and the Design of a Delivery Network for Mobile Commerce Services

Boston University Management Working Paper No. 2002-04

21 Pages Posted: 23 Sep 2005

See all articles by Oleg V. Pavlov

Oleg V. Pavlov

Worcester Polytechnic Institute (WPI) - Department of Social Science & Policy Studies

P. R. Balasubramanian

Boston University - Department of Management Information Systems

Date Written: May 2002

Abstract

Wireless industry has enjoyed an impressive growth over the past few years. However, recent developments in the marketplace suggest that future growth depends on offering customized mobile commerce-related data services targeted at commercial customers. A theoretical framework that we introduce in this paper shows that such key parameters as the client network size, performance of the delivery network, expected market demand, and degree of required customization lead to the formation of profit zones within the marketplace. Different profit zones call for different designs of the delivery network and its corresponding business model. Profits generated within each zone vary because of the tradeoffs between potential revenues from services and costs of customization. Our analysis also shows that under certain conditions the dominant industry form might be evolving towards a vertically integrated service provider.

Keywords: Mobile services, wireless services, mobile operators, quality of service, telecommunications

JEL Classification: L15, L16, L43, L96

Suggested Citation

Pavlov, Oleg V. and Balasubramanian, P. R., Application Customization, Profit Zones, and the Design of a Delivery Network for Mobile Commerce Services (May 2002). Boston University Management Working Paper No. 2002-04, Available at SSRN: https://ssrn.com/abstract=806165 or http://dx.doi.org/10.2139/ssrn.806165

Oleg V. Pavlov (Contact Author)

Worcester Polytechnic Institute (WPI) - Department of Social Science & Policy Studies ( email )

100 Institute Road
Worcester, MA 01609
United States

HOME PAGE: http://www.olegpavlov.org

P. R. Balasubramanian

Boston University - Department of Management Information Systems ( email )

595 Commonwealth Avenue
Boston, MA 02215
United States

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