TY - JOUR
T1 - Demand curves and operator strategies in the finnish mobile broadband market
AU - Katsigiannis, Michail
AU - Valagiannopoulos, Constantinos
N1 - Funding Information:
Constantinos Valagiannopoulos was born in Athens in 1982. He received with honors the Dipl. Eng. degree in Electrical Engineering from National Technical University of Athens (NTUA), Greece in 2004, and the Ph.D. degree for studies on Electromagnetic Theory in 2009. He also holds a B.Sc. from Athens University of Economics and Business (AUEB) with specialization in Financial Engineering. From 2010, he works as a postdoctoral researcher in the Department of Radio Science and Engineering of the Aalto University, Finland. Dr. Valagiannopoulos’s research interests include Electromagnetic Theory, Scattering, Metamaterials and their applications in devices controlling the electromagnetic fields. He has authored or coauthored over 50 works in international refereed scientific journals and presented numerous reports in international refereed scientific conferences. Dr. Valagiannopoulos was the recipient of the International Chorafas Prize for the Best Doctoral Thesis in 2008 and the Academy of Finland Postdoctoral Grant for 2012-2015.
PY - 2014/1/1
Y1 - 2014/1/1
N2 - Finland, among the first to adopt mobile broadband services, faces rapid growth of mobile data traffic. Therefore, Finnish mobile operators continually invest in their radio access networks to handle this growth, which represents an attractive revenue source. This study presents a demand curve estimate for mobile broadband data traffic, which takes into account the impact of technology evolution on network coverage and capacity. Based on the demand curve and the market equilibrium, this study proposes two strategies for mobile operators: i) reducing the marginal cost of traffic, and ii) changing the pricing structure. Assuming that mobile operators are price-takers (perfect competition), the findings of this study indicate that a continuing reduction of marginal cost is imposed by market forces. However, this policy of cost reduction will inevitably reach its limits. Thus, this study proposes a change in pricing structure from flat-rate tariff to usage-based charging.
AB - Finland, among the first to adopt mobile broadband services, faces rapid growth of mobile data traffic. Therefore, Finnish mobile operators continually invest in their radio access networks to handle this growth, which represents an attractive revenue source. This study presents a demand curve estimate for mobile broadband data traffic, which takes into account the impact of technology evolution on network coverage and capacity. Based on the demand curve and the market equilibrium, this study proposes two strategies for mobile operators: i) reducing the marginal cost of traffic, and ii) changing the pricing structure. Assuming that mobile operators are price-takers (perfect competition), the findings of this study indicate that a continuing reduction of marginal cost is imposed by market forces. However, this policy of cost reduction will inevitably reach its limits. Thus, this study proposes a change in pricing structure from flat-rate tariff to usage-based charging.
KW - Demand curve
KW - Finland
KW - Forecast
KW - Long term evolution (LTE)
KW - Marginal cost
KW - Mobile broadband
KW - Pricing structure
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U2 - 10.4018/ijbdcn.2014010102
DO - 10.4018/ijbdcn.2014010102
M3 - Article
AN - SCOPUS:84937877798
VL - 10
SP - 30
EP - 46
JO - International Journal of Business Data Communications and Networking
JF - International Journal of Business Data Communications and Networking
SN - 1548-0631
IS - 1
ER -