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5
telecommunications market was completely liberalized. After 1998,
the telecom-
munications market has been broken up into three major sectors:
5
Development and retail of user equipment.
5
Network operation.
5
Service, applications, and content provision.
There is full competition within each of these sectors. However, network opera-
tions are subject to certain regulation to ensure interoperability
between customers
subscribing to different networks.
It is expensive to build and operate telecommunications networks. Therefore,
two types of operators not owning network infrastructure have been allowed into
the market (in particular, the mobile market): resellers
of traffic and virtual net-
work operators. These operators increase competition and make the market richer
for the users.
?
Questions
1. What is the key source of revenues for resellers?
2. What are the sources of revenues for mobile network operators?
3. Why may renting out a communication network be a good business?
v
Answers
1. Discounts for buying large amounts of traffic time from ordinary operators.
2. Subscription fees,
traffic fees, sales of bulk traffic to resellers, rents from virtual
network operators.
3. Increased
revenues due to rental fees, and that competitor users churn to the
MVNO renting the network.
References
Lando, S. D., et al. (1994).
Fordham Law Review, 62.
The
global MVNO landscape, 2012–2014. (2014, 12 June)
GSMA intelligence.
Chapter 5 · Digital Market Evolution
© The Author(s), under exclusive
license to Springer Nature
Switzerland AG 2021
H. Øverby, J. A. Audestad, Introduction to Digital Economics,
Classroom Companion:
Business,
https://doi.org/10.1007/978-3-030-78237-5_6
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