Wireless Telecommunications Market Research Articles

CAN NON-DOMINANT ENTITIES BEHAVE DOMINANTLY: REVISITING THE CONTOURS OF PREDATORY PRICING UNDER INDIAN COMPETITION LAW.

Predatory pricing policy in India is at crossroads with Jio becoming the largest player in the wireless telecommunication market and reducing the market to a triopoly. There is a need for the Competition Commission of India to reflect on its enforcement policy under Section 4 of the Indian Competition Act, 2002. The article starts by exploring the concept of predatory pricing and why it remains a contested concept. The second part of the paper argues the need for revisiting the dominance requirement to initiate an investigation under Section 26 read with Section 4 of the Indian Competition act by drawing inferences from US and France antitrust law. It shall discuss in detail the need for adopting an attempted monopolization benchmark for cases of predatory pricing. The third part proposes two thresholds (a) common market share and; (b) proof of exclusion, that the commission can adopt in order to differentiate legitimate promotional pricing from illegitimate predatory pricing. The article questions the major premises on which predatory pricing abuse can be invoked. It will be illustrated, that a non-dominant entity can achieve the same result of distorting competition as a dominant entity can, by predation. In particular, it will be argued that for an entity to commit predation, market power is not a prerequisite instead the commission must look at the effect in the market. Therefore, the Competition Commission of India is well advised to revisit the prerequisite of dominance for predatory pricing wrongs.

The Impact of Corruption on Consumer Markets: Evidence from the Allocation of Second-Generation Wireless Spectrum in India

AbstractTheoretical predictions of the impact of corruption on economic efficiency are ambiguous, with models allowing for positive, negative, or neutral effects. While much evidence exists on levels of corruption, less is available on its impact, particularly its impacts on consumer markets. This paper investigates empirically the effect of the corrupt sale of spectrum licenses to ineligible firms on the wireless-telecommunications market in India. I find that the corrupt allocation had, at worst, no impact on the number of subscribers, prices, usage, revenues, competition, and measures of quality. I argue that the market-based transfer of licenses to competent firms other than the original awardees, combined with fierce competition in the telecommunications sector, may have mitigated potential deleterious impacts of corruption on consumers. These results suggest that the original corrupt allocation did not matter, which provides support for the Coase theorem.

Marketing strategies in the wireless telecommunications market: a customers' perception

This research attempts to examine the main business strategies that may affect customer satisfaction from wireless broadband services and, as a result, business market share measured in terms of customer retention and customer acquisition. A research model is developed where the effect of a number of financial (three) and non-financial (11) factors on customer satisfaction, retention and acquisition is examined. The model has been empirically tested using data gathered from 165 people who use broadband and wireless services and applications. The results show that although financial factors affect users’ satisfaction, it is the non-financial factors that mainly affect it. From those, price differentiation, bandwidth, ease of use, empathy, enjoyment and after sales support play the most crucial role. Further, customer satisfaction significantly affects the size of market share hold by a firm, being the main determinant of customer retention, which, in turn, significantly affect (along with customer satisfaction) customer acquisition.

음성무제한 요금제경쟁의 경제적 분석 : 무제한요금제 도입 필요조건과 통신사의 선택

As the gaps become narrower in interconnection fee and volume rate, the MNOs began to introduce flat pricing for unlimited voice traffic competitively in Korea wireless telecommunication market : 'unlimited talks within intra-network' by the 1st operator, followed by the 3rd operator's 'unlimited talks over all networks'. As a result, subscribers tip in toward the third ranked operator and could bring a substantial change to steadfast market structure over the last decade in Korea. This paper aims to develop a simple economic model to analyze competition with flat pricing for unlimited voice traffic, and to check whether the pricing can be appropriate for the MNOs. The results show that MNOs already step in the necessary conditions to launch flat pricing for voice traffic. It also predicts that the MNOs compete with unlimited talk over all networks and set a single fee in an equilibrium. At present, the MNOs run virtually identical pricing for unlimited talk over all networks, considering their differentiation with respect to service quality, coverage and brand preference.

A credit assessment mechanism for wireless telecommunication debt collection: an empirical study

The wireless telecommunication market in Taiwan is now saturated. As the competition between wireless service carriers intensifies, retaining customers becomes more difficult. To prevent companies from increasing bad debt and experiencing customer churn, this study aims to apply data mining method to build a credit assessment mechanism that can effectively evaluate customer credit risks and help wireless service carriers to enhance the quality of debt collection processes by customizing collection strategies for various customer groups. The application of the proposed mechanism to related problems in a wireless telecommunication company in Taiwan has shown satisfactory effectiveness, accounting for a savings of $2 million of a total $500 million annual revenue. A mere 0.4 % savings is significant, given that wireless service carriers in Taiwan typically allocate 2–4 % of their revenue to uncollectible debts.

Estimating the switching costs in wireless telecommunication market

PurposeSwitching cost is an important concept in the study of consumer loyalty which has implications for organizational business strategy and regulatory policies. Much research has already examined the formation and influence of switching costs on the consumers' repeated purchase intentions, but little research has focused on quantitative measurement of the switching cost itself. This paper aims to address this issue.Design/methodology/approachBy game theory, a complete Nash‐Bertrand model is proposed to accurately estimate consumer switching costs considering price compensation and transport costs in a duopoly. The relationship between switching costs and market structure is then analyzed by using the example of Hong Kong's wireless telecommunication market. From the observed data of China's wireless telecommunication industry, the model calculates switching costs per year of China Mobile and China Unicom's users respectively, as well as other variables.FindingsThe results demonstrate that reducing consumer switching costs will benefit small operators and increase competition in a winner‐take‐all market.Originality/valueThe model is valuable in calculating unseen switching costs and studying the impact of switching costs on market structure, especially for a duopoly in telecommunication.

An Analysis of the Latin American Wireless Telecommunications Market Portfolios of Telefonica and America Movil

In response to slowing growth, intensifying competition in their traditional wireless voice, text markets with an eye toward increasing revenues from offering a bundle of mobile and fixed-line voice, data, text, and video services to subscribers, management at Telefonica and America Movil have restructured their companies and reconsidered their internationalization strategies. This paper focuses on the two companies’ Latin American wireless market portfolios, providing background on why these reorganizational and strategic actions were taken. In particular, the paper compares the portfolios with respect to their market attractiveness and competitive positions in 2008 relative to 2002 on both an overall average and degree of variance basis across the markets in the portfolios. The portfolio analysis technique employed in the paper may have wider applicability for formulating corporate strategy.

Technology and market conditions toward a new competitive landscape in the wireless access market

This article argues that the wireless telecommunication market is about to witness a shift in business models and market structure as a result of the deployment of new broadband access technologies, spectrum management techniques, policy-based network management, and the drive of new entrants to compete against the incumbents. The article discusses four agents of evolutionary changes: a range of broadband wireless access standards and technologies that are front-runners in the industry's efforts to embody the next generation of wireless networks; new provider-customer relationships facilitated through changes in the usual contract patterns that will allow consumers to enter short-term and spot contracts with the new wireless providers; an overview of the current debate on spectrum management; and an explanation of how autonomic communications and policy-based management would support the new structure. Finally, the article asserts the necessity for the integration of the heterogeneous technologies that make up this emerging, hybrid wireless landscape, and describes the economic characteristics of a new competitive scenario.

Potential moderators of the link between rate plan suitability and customer tenure: A case in the Canadian mobile telecommunications industry

In the competitive wireless telecommunications market, customer retention has become a priority to many carriers, as they face high customer acquisition cost and high churn rate. Prior literature has found that wireless customers often subscribe to inappropriate rate plans, and thus overpay for their services. A new database marketing strategy called ‘Rate Plan Optimization’ has emerged, but literature in this area is still limited. This paper aims to strengthen our understanding of this strategy by analyzing the potential moderating effects of customer's frequency of handset change, frequency of rate plan change, customer age and contract status on the linkage between rate plan suitability and customer tenure. The data set covers 1249 wireless users in Canada. The hypotheses are tested by factorial Analysis of Variance (ANOVA). This paper argues that except customer's age, all other factors being analyzed have positive moderating effects on the linkage.

Two-level model of customer retention in the US mobile telecommunications service market

The unprecedented growth of competition in the wireless telecommunications market has raised the importance of retaining current customers. Retaining existing customers is much less expensive and difficult than recruiting new customers in a mature market such as the US wireless communications industry. In addition to the reduced cost, there is the potential and opportunity value of customers gained over a long period of time. Because wireless service is not a one-time sale like commodity products but rather, a continuous service, service providers can offer additional services over the length of a customer's tenure to generate more revenue. This study focuses on understanding the factors related to customer retention behavior, both behavioral factors such as switching costs and customer satisfaction and demographic factors. Its two goals are to understand (1) how factors that affect switching costs and customer satisfaction, such as length of association, service plan complexity, handset sophistication and the quality of connectivity, drive customer retention behavior, and (2) how customer demographics such as age and gender affect their choice of service plan complexity and handset sophistication, leading to differences in customer retention behavior. The methodologies used were a binary logistic regression model and a two-level hierarchical linear model.