Abstract
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.
| Original language | English |
|---|---|
| Pages (from-to) | 30-46 |
| Number of pages | 17 |
| Journal | International Journal of Business Data Communications and Networking |
| Volume | 10 |
| Issue number | 1 |
| DOIs | |
| Publication status | Published - Jan 1 2014 |
| Externally published | Yes |
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Keywords
- Demand curve
- Finland
- Forecast
- Long term evolution (LTE)
- Marginal cost
- Mobile broadband
- Pricing structure
ASJC Scopus subject areas
- Management Information Systems
- Computer Networks and Communications
Cite this
Demand curves and operator strategies in the finnish mobile broadband market. / Katsigiannis, Michail; Valagiannopoulos, Constantinos.
In: International Journal of Business Data Communications and Networking, Vol. 10, No. 1, 01.01.2014, p. 30-46.Research output: Contribution to journal › Article
}
TY - JOUR
T1 - Demand curves and operator strategies in the finnish mobile broadband market
AU - Katsigiannis, Michail
AU - Valagiannopoulos, Constantinos
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
UR - http://www.scopus.com/inward/record.url?scp=84937877798&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=84937877798&partnerID=8YFLogxK
U2 - 10.4018/ijbdcn.2014010102
DO - 10.4018/ijbdcn.2014010102
M3 - Article
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 -