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Economic analysis of the introduction of the MVNO system and its major implications for optimal policy decisions in Korea
Abstract
This study analyzes the anticipated economic effects arising from the introduction of the mobile virtual network operator (MVNO) system in the mobile communications service market. For the analysis, actual data (or estimated data)—such as price elasticity, the number of subscribers, traffic volume, rate, and access charge—were combined with an assumption about a competition scenario in the future market. Based on this analysis, consumer surplus, and change in the service provider's profits were estimated according to the type of policy that may be adopted for the MVNO system by the regulator. The results of the analysis indicate that consumer surplus appears to increase largely because of the reduction of the mobile service rate by the promotion of “service-based competition,” which occurs upon adoption of an MVNO policy in the mobile communication service market. Moreover, the introduction of an MVNO system into the mobile communication market seems to be socially beneficial regardless of policy type if access charges are set reasonably by a cost-plus or retail-minus method. In particular, in order to make sense of the introduction of a special MVNO, whether by the cost-plus method or the retail-minus method, the correct discount rate must be used in setting an access charge between the special MVNO and the significant market power (SMP) mobile network operator (MNO).
... Kim and Seol [29] divided the MVNO type of a CDMA network into three typesspecifically, the simple type, the partial type, and the complete type -and suggested the promotion of competition through a cost-plus-based wholesale price regulation, as shown in Eq. (1), since the consumer surplus and social welfare significantly increase when any one of these three types is adopted. ...
... The interface of the 3G SGSN data switching system to the • QoS policy control, fee policy control, etc. [56,60]. A 3G M2V owns the GGSN switching system and interfaces to the SGSN data switching system of an MNO to provide the data service [29]. A 4G LTE IoT can be categorized into one of three types as shown in Table 3, referring to the technical categorization criteria of the 2G CDMA [29], 3G WCDMA [27,32] and in-house 4G LTE telecommunications systems in Fig. 2, Article 38 [24], and the bandwidth wholesale pricing policy [45]. ...
... A 3G M2V owns the GGSN switching system and interfaces to the SGSN data switching system of an MNO to provide the data service [29]. A 4G LTE IoT can be categorized into one of three types as shown in Table 3, referring to the technical categorization criteria of the 2G CDMA [29], 3G WCDMA [27,32] and in-house 4G LTE telecommunications systems in Fig. 2, Article 38 [24], and the bandwidth wholesale pricing policy [45]. The X A type does not own the S-GW and P-GW switching systems, but it does own the IoT as well as the near field communication (NFC) and location based service (LBS) platforms to connect to a P-GW switching system and provide the mobile data service by paying the wholesale price based on the cost, retail or bandwidth. ...
The aim of this study is to facilitate market access by Internet of things (IoT) mobile virtual network operators (MVNOs) (‘M2V’ hereinafter) for the purpose of providing the IoT services required to implement more advanced smart tourism in the tourism sector, which is heavily influenced not only by the Internet but also by information and communications technology (ICT) in the era of fourth generation (4G) long term evolution (LTE) networks. The study produced the following results. It established a 4G LTE network-based technological access system, which is commercially offered all over the world, and suggested business models featuring diverse interworking between network and system through M2V access to 4G LTE, as well as the resulting wholesale price calculation model according to bandwidth. Based on the research model, both the Korean government and governments of other countries can be expected to further advance smart tourism in the future by implementing policy and institutional supports that aim to enable 4G LTE network-based M2V to realize a technological access system, and by inducing M2V to make inroads into the tourism industry based on diversified business models.
... Sixth, a mobile virtual network operator (MVNO) is a mobile operator that provides mobile communication services but does not have its own radio access network [10], [11]. ...
... Foros and others [7] proposed a conceptual model for calculating the national roaming-related economic effect of MNS, using four scenarios: two national roaming option scenarios and two investment decision scenarios. Kim and Seol [10] estimated the economic effect expected from the introduction of an MVNO scheme in the mobile communication service market. ...
... Using a simulation analysis in which the effects of MNS are estimated according to a certain scenario results in case-by-case analysis that does not provide concrete elements of CAPEX or OPEX savings; this makes the results unsuitable for use in other estimations under different circumstances. Kim and Seol [10], a rare example in this regard, presented the components of CAPEX and OPEX that are reduced as a result of the introduction of MNS. However, their analysis was limited to only one type of MNS (MVNO) and, for this reason, cannot be used for other types. ...
... Sixth, a mobile virtual network operator (MVNO) is a mobile operator that provides mobile communication services but does not have its own radio access network [10], [11]. ...
... Foros and others [7] proposed a conceptual model for calculating the national roaming-related economic effect of MNS, using four scenarios: two national roaming option scenarios and two investment decision scenarios. Kim and Seol [10] estimated the economic effect expected from the introduction of an MVNO scheme in the mobile communication service market. ...
... Using a simulation analysis in which the effects of MNS are estimated according to a certain scenario results in case-by-case analysis that does not provide concrete elements of CAPEX or OPEX savings; this makes the results unsuitable for use in other estimations under different circumstances. Kim and Seol [10], a rare example in this regard, presented the components of CAPEX and OPEX that are reduced as a result of the introduction of MNS. However, their analysis was limited to only one type of MNS (MVNO) and, for this reason, cannot be used for other types. ...
As mobile markets in most developed countries are rapidly coming close to saturation, it is increasingly challenging to cover the cost of providing the network, as revenues are not growing. This has driven mobile operators, thus far mostly involved in facility-based competition, to turn their attention to network sharing. There exist various types of mobile network sharing (MNS), from passive to active sharing. In this paper, we propose a model, based on the supply-demand model, for evaluating the economic effects of using six types of MNS. Our study measures the economic effects of employing these six types of MNS, using actual WiBro-related data. Considering lower service price and expenditure reduction, the total economic effect from a year's worth of MNS use is estimated to be between 513 million and 689 million USD, which is equal to three to four percent of the annual revenue of Korean mobile operators. The results of this study will be used to support the establishment of a MNS policy in Korea. In addition, the results can be used as a basic model for developing various network sharing models.
... Moreover, most of the previous studies that have been undertaken adopt a largely theoretical perspective. Only a few studies include an empirical analysis, with these often focused on a single country (see, for example, Kim and Park (2004), Kim and Seol (2007) and Olla and Patel (2002)). Even when the analysis is cross-country analysis, the observations correspond to just one period (Shin & Bartolacci, 2007). ...
... That MNOs host on their networks virtual operators, which are simultaneously customers and competitors, has inevitably attracted the attention of researchers. Previous studies have focused on wholesale price determination (Banerjee & Dippon, 2009;Kalmus & Wiethaus, 2010;Kim & Park, 2004;Song, 2010;Ulset, 2002), the role of regulators in encouraging the introduction of MVNOs as a means of increasing competition (Banerjee & Dippon, 2009;Kim & Seol, 2007;Maitland et al., 2002) and the determinants of MVNOs diffusion based on market structure (Shin, 2008; sometimes be virtually indistinguishable from those provided by MNOs" (Banerjee & Dippon, 2009: 72). Given that this study tries to explain differences between MNOs in their wholesale market shares, we will consider MVNOs in a wider sense by including SP, ESP and Full virtual operators which offer mobile services to customers in the last stage of the telecommunications value chain under their own brand by purchasing airtime from MNOs. 2 ...
... Song (2010) suggests that under efficiency conditions for MVNOs, the intervention of regulator is not necessary because MNOs are going to host virtual operators voluntarily. Kim and Seol (2007) study the anticipated economics effects from the introduction of MVNOs depending on the type of virtual operators and regulation in Korea. In contrast to the previous two studies, Kim and Seol (2007) found that an active policy by the regulator of allowing access and regulation wholesale prices is generally desirable when it comes to generating consumer surplus. ...
This paper extends previous research examining wholesale market shares of mobile network operators (MNOs). This study demonstrates that wholesale market concentration has decreased over time because of the increase of competition of MNOs for hosting mobile virtual network operators (MVNOs). However, differences in wholesale market shares between MNOs have not disappeared. We propose that those operators that are late entrants in a market and belong to an international group with a proactive attitude towards hosting virtual operators positively influences wholesale market shares of MNOs. The empirical analysis is based on a panel data from 2000 to 2010 corresponding to MNOs and virtual operators in five European countries with high development of the virtual mobile industry. By closely examining KPN we show how being an international mobile group specialising in the wholesale market across Europe has enabled it to exploit complementarities that exist between traditional and virtual businesses.
Available until 26th March 2014 at: http://elsarticle.com/1ejh7od
... Fifth, users in network roaming are allowed to roam onto a host network if the home network is not present in a particular region. Sixth, an MVNO is a mobile operator that provides mobile communication services but is one that does not have its own RAN [9]. ...
... Barrett and Jackson [12] compared the reduction of CAPEX and OPEX for seven types of MNS. Kim and Seol [9] estimated the economic effect of implementing MVNOs in Korea. Industry analysts and consulting papers report network cost savings of 20% to 50% for most types of MNS. ...
Mobile operators in saturated markets increasingly favor mobile network sharing (MNS) over facility-based competition. Previous research examining MNS primarily focused on its positive effects, while the negative effects were largely overlooked. This study proposes a decisionmaking model using an analytic hierarchy process technique to evaluate decision-making criteria among various types of MNS policies. The decision-making model was applied to Wireless Broadband services in Korea todetermine the relative importance of both positive and negative evaluation criteria and preference among multiple types of MNS policies. Positive evaluation criteria(that is, efficiency) were far greater in importance than negative evaluation criteria (that is, competition harm).The preference for adopting MNS among five alternativeapproaches was also revealed. The study findings offer immediate policy insights in Korea and provide a decisionmaking framework for policy makers in other countries toutilize.
... Moreover, the different modalities of regulation especially oriented to consumer's welfare are analysed. As for the specificity of the MVNOs, besides the aforementioned characteristics of the virtual operators, other factors allow to divide MVNOs into different typologies, such as the original business context, the competitive position, the strategic exigencies, and the economic features (Audestad, Gaivoronski, & Werner, 2006; Kim & Seol, 2007; Banerjee & Dippon, 2009). MVNOs are classified according to their telecom or not telecom origin, that is whether their original business context comes or not from the mobile telecommunication industries. ...
... Undoubtedly, non-telecom MVNOs can succeed in the competition only by leveraging their already well-known brand or their widely spread distribution channels, or by finding a niche in the market where they can make a workable offer (Oftel, 1998; Kiiski & Hämmäinen, 2004; Kim & Park, 2004). More in general, it is possible to observe that the strategic decisions of a not specific MVNO are placed at one of the three levels of the operator value chain: the network infrastructure, the mobile service development and supply, and the interface with the end-users and consumers (Audestad, et al., 2006; Kim & Seol, 2007). In particular, it is helpful to notice that some MVNOs can decide to make significant investments in the network infrastructure by buying or partnering with third parties all the necessary services beyond the spectrum; in this case they gain independence from their HNO and take the role of a full MVNO. ...
A mobile virtual network operator (MVNO) provides mobile telecommunication services by eluding the constraints of the radio communication infrastructure and establishing an agreement with a hosting network operator (HNO) for the use of its spectrum. Thus, MVNOs offer a wide range of mobile services and directly compete with every mobile network operator (MNO). This paper studies the economic justifications for potential regulatory intervention that defines the level of mobile termination rates (MTRs) and negotiations and agreements among MVNOs and HNOs. The results show that symmetric MTR reduction leads to competition growth among operators, forcing every operator to reduce retail prices and, consequently, to enhancing consumer welfare. The paper also finds that a collaborative strategy adopted by an HNO and an MVNO is advantageous for both and induces a reduction in retail prices, thus weakening other MNOs.
... A company that does have frequency allocations and the required infrastructure to run an independent mobile network is simply known as a mobile network operator (MNO). MVNOs are gaining significant market share, changing the supply chain of telecommunications, and are increasing churn and subscriber acquisition costs in mobile markets (Kim & Seol, 2007). Because most MVNOs have focused on offering discounted services, they have increased competition to the benefit of consumers, but they also offer the government the possibility of maintaining some control over the minutes passing over the network in which the government has made a substantial investment. ...
... Although the models in this study are collective typology, and thus, do not have specific answers, the structural relations of the factors in the models provide important implications for telecom policy, which is itself a combination of numerous factors in the ever-changing telecom ecology. Previous studies (Cricelli et al., 2009; Kim & Seol, 2007; Shin, 2008) have shown various benefits of MVNO diffusion in telecom markets such as increasing competition, lowering entry barriers, etc. However, these studies describe the specific economic factors in a limited setting and fail to provide the overall picture of how the individual factors are structurally related to overall factors in the telecom context. ...
This study seeks to validate a comprehensive model of consumer acceptance in the context of MVNOs. While the MVNO business model has gained much popularity over the past few years, it shows a sign of drastic decrease. This study uses the unified theory of acceptance and the use of technology (UTAUT) model with constructs from the innovation diffusion theory (IDT) such as compatibility, relative advantage and social influence. Structural equation modeling is used to construct a predictive model of attitudes toward the MVNO services. While the model confirms the classical role of technology adoption factors (i.e., perceived usefulness and ease of use are key antecedents to consumers’ intention), the results also show that users’ intention and usage are influenced by IDT factors. The model brings together extant research on MVNO and provides an important cluster of antecedents to eventual technology acceptance via constructs of behavioral intention to use and to the actual MVNO usage. Policy implications of MVNO are discussed in terms of consumer adoption and market diffusion.
... x An earlier 2007 study (Kim & Seol, 2007) quotes estimates for S. Korea ranging from 20% to 27%. xi For voice calls, there is a reasonable prospect that traffic will be balanced. ...
The author is advising the Cook Islands on how to introduce mobile competition, drawing on the experience of Australia. In both countries the impact of infrastructure competition on mandated geographically uniform pricing is being (or proposed to be) addressed with a levy. The different approaches to measuring costs and setting the levy are contrasted. The paper proposes that a universal service levy has to be coupled with consistent access pricing to have efficient competition consistent with universal service policy. Interconnection between networks is free but the pricing of resold wholesale services should be consistent with the aims of the levy; to ensure universal service and efficient competition.
... The study provides the point at which the regulator's intervention is necessary to align with the benevolent welfare-maximizing regulator's interests. Kim and Seol [12] analyze the anticipated economic effects of the introduction of the MVNO system for Korean mobile communications. The results indicate that the consumer surplus increases because of the reduction in the mobile service rate and highlight the importance of discount rates in setting an access charge between MVNO and mobile network operators. ...
The increase in data traffic calls for investment in mobile networks; however, the saturating revenue of mobile broadband and increasing capital expenditure are discouraging mobile operators from investing in next‐generation mobile networks. Mobile network sharing is a viable solution for operators and regulators to resolve this dilemma. This research uses a difference‐in‐differences analysis of 33 operators (including 11 control operators) to empirically evaluate the cost reduction effect of mobile network sharing. The results indicate a reduction in overall operating expenditure and short‐term capital expenditure by national roaming. This finding implies that future technology and standards development should focus on flexible network operation and maintenance, energy efficiency, and maximizing economies of scale in radio access networks. Furthermore, mobile network sharing will become more viable and relevant in a 5G network deployment as spectrum bands are likely to increase the total cost of ownership of mobile networks and technical enablers will facilitate network sharing.
... To address this disadvantage, a couple of different projects have been started around the world to generate new forms of competition. For example, in Italy the Mobile Virtual Network Operator (MVNO) (Kim & Seol, 2007) has been set up to sell mobile communication but without any direct investment in the infrastructure of the sector. The MVNO operates as a new mobile company with specific numbers, brands, pre-paid cards, account sites, and credit access; it uses the infrastructures of existing companies, searching and finding offers in the market, partnering with the company that offers the best terms, and renting the mobile phone numbers and a portion of the communication system. ...
This manuscript discusses a theoretical competitive scenario for telecommunications services, in particular voice over Internet protocol (VoIP), and finds that the economic benefits of the current technological convergence are based on three main factors: technological advances and updates; regulation failures related to technological complexity; and consumer inability to exploit the benefits of convergence. This study begins by giving the background to voice communication in the telecommunications sector and the misunderstanding of the competitive boundaries between technologies, service providers, and usage applications generated in an unregulated sector. Second, the kinds of regulation that organizes the development and pricing of integrated or bundled services are briefly discussed and presented. Third, theoretical analysis of the competitive environment is interpreted in terms of the three factors: technological advances, regulation failure, and consumer knowledge of convergence. Results derived from these factors are presented in the context of VoIP services. Finally, the work concludes by outlining the implications for regulatory reform and the impact on competitive behavior, and describes possibilities for the future management of the technology sector.
... The MVNO refers to the organization who provides or resells mobile voice and data services to end users leasing the mobile spectrum of an existing MNO (Mobile Network Operator) by connecting to its wireless network but not obtaining the license for use of the radio spectrum [1]. These emerging operators are gaining popularity throughout the world especially in US , Europe and Asia as described in [2][3][4]. ...
In this paper, we investigate positioning on the mobile market of a Mobile Virtual Network operator (MVNO). We consider a market segmentation based on brand appeal, taking into account a segment of customers that are attached to the brand of the traditional operator and another segment where customers are less sensitive to the brand appeal of the operator. We consider three cases depending on the presence of the Mobile Network operator (MNO) on each segment and look for assumptions allowing a global Nash equilibrium.
... The ATE terms do not take the expectation conditional on R. While E[Kim & Seol, 2007; Suehler, Dewenter, & Haucap, 2006). Our exclusion restrictions may be invalid if the introduction of MNP and MVNO are correlated with firm counts or IMTS prices and with the foreign country market structure variables we use as instruments. ...
... Despite the popularity of green marketing as strategic initiative in Korea, little is known about its impact on consumers' reactions in the retail setting. Several researchers and practitioners in Korea focus mainly on economic condition (e.g., GDP) and its relation to energy efficiency, and industrial CO 2 emissions in manufacturers (Jin, 2007;Kim, 2002;Kim & Seol, 2007;Lim, Yoo, & Kwak, 2009;Oh & Lee, 2004;Park & Heo, 2007). They demonstrate that economic growth supports industrial sustainability practice on a macro basis, implying that an energy conservation issue is feasible without compressing economic growth in the long run. ...
... Em razão desta desvantagem, projetos diferentes têm sido iniciados no mundo, gerando novas formas SEOL, 2007), o qual iniciou a vender comunicação móvel, mas sem nenhum investimento direto na infraestrutura do setor. O MVNO opera como uma nova empresa celular, com números específicos, marca própria, cartões pré-pagos, sítios (sites) de conta, acesso a crédito, dentre outros. ...
Technological convergence allowed for the carrying out of communication services, based on different technologies, assuring the same use for users and better benefits for providers. This way, both entrepreneurial and residential consumers had an increase in their choice for joint services as well as for service providers. The existing regulation does not analyze the service as a result, but as a product or technology to be authorized. Based on the literature of utilization and behavior of the consumer, this article describes and discusses a strategy of marketing used by communication opoerators, who take advantage from the inefficiency of the regulation and legislation. A theoritical analysis of the competitive environment and use of technology points out that the economic benefits from technological convergence go on due to four factors: technological progress, regulation failures, technological complexity, and lack of skill for exploring convergence benefits. The misuse of these services by telecommunication providers, given the technological convergence and integration of systems in this sector, are specifically discussed in the context of voice communication services at a long distance, utilizing VOIP, establishing proposals for defining the better use of technology which may assure a fair competitiveness for the market.
... An MVNO can be viewed as a special implementation of wireless virtualization. The strict definition of an MVNO differs from country to country [6]. Typically a MVNO leases spectrum from one or more MNOs, and connects its own subscribers to its own switching center. ...
Virtualization of wired networks and end computing systems has become one of the leading trends in networked ICT systems. In contrast relatively little virtualization has occurred in infrastructure based wireless networks, but the idea of virtualizing wireless access is gaining attention as it has the potential to improve spectrum utilization and perhaps create new services. In this paper we survey the state of the current research in virtualizing wireless networks. We define and describe possible architectures, the issues, hurdles and trends towards implementation of wireless network virtualization.
... An MVNO can be viewed as a special implementation of wireless virtualization. The strict definition of an MVNO differs from country to country [6]. Typically a MVNO leases spectrum from one or more MNOs, and connects its own subscribers to its own switching center. ...
Virtualization of wired networks and end computing systems has become one of the leading trends in networked ICT systems. In contrast relatively little virtualization has oc-curred in infrastructure based wireless networks, but the idea of virtualizing wireless access is gaining attention as it has the potential to improve spectrum utilization and perhaps create new services. In this paper we survey the state of the current research in virtualizing wireless networks. We define and describe possible architectures, the issues, hurdles and trends towards implementation of wireless network virtualization.
... This contrasts with the idea that the entry of MVNOs encourages competition and benefits customers through price decreases (European Commission, 2006;Oftel, 1999). The empirical analysis seems to go in this direction: Kim and Seol (2007) have computed the welfare impact of MVNOs' entry in Korea, finding a decrease in prices of services provided by both MVNOs and traditional operators. As Hoffler and Schmidt (2008) point out, though, even if prices rise, consumers are not necessarily harmed by MVNOs' entry, as they can benefit, such as the increase in product variety. ...
... The ex ante regulation would guarantee every potential new operator the possibility of entering the mobile telecommunications industry and competing correctly. Moreover, it has been demonstrated that MVNO and its hosting network operator (HNO) could take advantage of their collaboration in terms of profits and market shares (Dippon and Banerjee, 2009; Cricelli et al., 2009) and in consequence of a further indirect benefit deriving from the decrease of profit and market share of other competitors (Cricelli et al. 2012; Kim and Seol, 2007). This leads to consider that government's policy should implement ex post regulation measures in order to monitor the modalities of agreements between HNO and MVNO, avoiding that MVNO could damage the other MNO indirectly. ...
Mobile termination rate, degree of asymmetry, and degree of substitutability are the elements which mostly characterize the mobile telecommunication market complexity. However, if mobile termination rate is considered as a primary item to be examined and regulated, the degrees of asymmetry and substitutability which characterize and define the structural aspects of the market are often not considered as strategic variable for the market competition.
In this paper, a model has been defined to analyze the strategic consequences of the regulatory interventions on modalities about the adoption of mobile termination rates. The analysis of the results obtained by the model, based on numerical simulations, has been focused on retail price strategies, market shares erosion, and profit allotment of real and virtual mobile operators under variations of economic and structural characteristics, in the attempt of providing suggestions for decision, strategic and regulatory process.
... On the opposite hand, the less the MVNO invests in infrastructure, the more it resembles a service provider, lacking in strategic freedom respect to the HNO. In this second case, characterized by the ownership of few infrastructural elements, the MVNO will sustain higher marginal costs [8]. In this connection, infrastructural diversity of operators implies different consequences on each network service element. ...
In the mobile telecommunication sector, the high competitiveness has increased the complexity of strategic interactions among operators. As the vertical integration has become anything but a choice and not a compelling technical solution, the contest takes place at different levels of the components of the operator value chain: the network infrastructure, the service development and supply, and the relationship with consumers.Mobile virtual network operators act as retailers and concentrate on the last segment of the value chain by establishing commercial agreements with hosting network operators, which act as manufacturers, to get access to radio communications infrastructure. Productive processes of mobile services offered by operators are different and this difference is imperceptible to customers. Processes difference mainly consists in the infrastructural diversity of the operators and implies different consequences on each network service element.A model has been defined to analyze the consequences of such diversity in the competition among HNOs, MNOs, and MVNOs by focusing the attention on the characteristics of the call path, in dependence of the types of operators. In fact, many variables interact to define the call path, such as marginal costs and revenues, infrastructural investments, and interconnection charges among operators. The analysis of the results, obtained by the model, gives information on variations of retail prices, market shares, and profit allotment, to adopt the proper strategies. In particular, the model results shed light on how certain MVNOs should enter the markets and adopt a collaborative strategy with HNOs. The model owns the capability of being applied to different contexts, thus representing for the regulator a potential instrument of relevant usefulness.
Law No. 36 of 1999 concerning Telecommunication has brought many changes, especially in the development of telecommunications infrastructure in Indonesia. However, the penetration of telecommunications services in the forefront, outermost, and backward regions is still relatively low. The government has made various efforts in terms of minimizing the gap in telecommunication services between urban and rural areas through various programs. However, an acceleration is needed so that the service disparity can be immediately overcome. One of the telecommunications products that can be applied to overcome these barriers is the Mobile Virtual Network Operator (MVNO). This study evaluates the most appropriate type of MVNO model to be applied in Indonesia by implementing the Consistent Fuzzy Preference Relations (CFPR) method. This method is able to accommodate expert opinion through a series of scientific steps so as to produce weights for each alternative type of MVNO model. The results obtained are that the most appropriate model to be applied in Indonesia by taking into account the criteria given. The implementation of this model is expected to be able to encourage the optimization of BTS USO that has been declared by the government.
Recent years have witnessed the rapid growth of mobile virtual network operators (MVNOs), which operate on top of existing cellular infrastructures of base carriers, while offering cheaper or more flexible data plans compared to those of the base carriers. In this paper, we present a two-year measurement study towards understanding various fundamental aspects of today's MVNO ecosystem, including its architecture, customers, performance, economics, and the complex interplay with the base carrier. Our study focuses on a large commercial MVNO with one million customers, operating atop a nation-wide base carrier. Our measurements clarify several key concerns raised by MVNO customers, such as inaccurate billing and potential performance discrimination with the base carrier. We also leverage big data analytics, statistical modeling, and machine learning to address the MVNO's key concerns with regard to data usage prediction, data plan reselling, customer churn mitigation, and billing delay reduction. Our proposed techniques can help achieve higher revenues and improved services for commercial MVNOs.
Cellular communication has played an important role in current data transmission networks. Nevertheless, the price of cellular communication service is much higher than wired communication service. Thus each data transmission service provider has to make optimal decisions on cellular data plan to reduce the cost. This work put forward an optimal data cost scheme for the data transmission service in virtualized wireless networks. A formal cost model is put forward and the optimal algorithms have been used to approach the optimal solution. The simulation results show the efficiency and feasibility of proposed optimal algorithms.
By allowing carriers to route telephone calls over low-cost private lines, international simple resale (ISR) makes it possible for carriers to provide international telephone service without owning an international circuit. When approved, ISR reduces entry barriers and can increase competition. Using data from US markets from 1995 to 2004, we estimate the effects of ISR on entry and retail prices. Results show that ISR has no effect on entry and actual competition. However, controlling for actual competition, ISR authorization causes an average reduction in prices of 32.7 percent. Markets with relatively high carrier surplus experience an additional reduction in the price by 0.4 percent, and prices are 3.4 percent lower in markets with relatively high private line capacity. Our findings suggest that ISR promotes potential competition and lower prices in markets where the threat of hit-and-run entry is more credible.
The network neutrality debate is closely related to social, political, and economic debates over the public information network and the duties of its private carriers. The paper begins by defining network neutrality before discussing the technology underpinning network neutrality. It then contextualizes the issue in terms of policy, innovation, values, and society of Korean context. It compares the different approaches adopted by other countries to the regulation of network neutrality. Regulatory approaches to net neutrality can be either devising a comprehensive regulatory framework or abandoning the option of regulatory intervention altogether. We propose a careful combination of government intervention and market forces as a Korean model for allowing networks to remain a free and open marketplace of ideas and economic, political, and social interactions. The results offer useful references on net neutrality in other countries.
This study estimates cost-based prices for wholesale voice and data services provided to 3G (WCDMA) MVNOs according to their distinct types. For estimation, 3G MVNOs are classified into different types, and the overall cost of WCDMA facilities are separated into voice and data components based on their subscriber rates, actual traffic rates, as well as efficiency consideration of traffic rates. The study then calculates cost-based wholesale prices of voice and data services for each of the 3G MVNO types. The result of this study shows that a cost-plus pricing scheme can help achieve the policy goals of the regulator, namely, lowering telecommunications tariffs and facilitating the introduction of new convergent-type services, far more effectively than the current retail-minus pricing scheme. The findings of this study may assist firms in developing business models based on 3G networks and telecom regulators in designing policies related to interconnection, mVoIP, prepaid calls, wholesale services, and network neutrality.
This study measures and compares the technology gaps related to the efficiency of Asia-Pacific Economic Cooperation (APEC) integrated telecommunications operators during a time period from 2001 to 2008 using the data envelopment analysis (DEA) meta-frontier approach. It is found that operators in the high penetration rate group have higher technical efficiency and smaller technology gaps on average than those in the low penetration rate group. However, operators with large amounts of revenue do not necessarily achieve higher efficiency and smaller technology gaps. Finally, policy implications on how to improve efficiency and reduce technology gaps in this sector are provided.
Given the prevalence of mobile data services and applications (MDSA) such as App Store, it is important to diffuse MDSA and understand user behavior toward it. Recent research on marketing and information systems (IS) has shed light on the habitual use of frequently used IS. This study attempts to develop a research model that clarifies the role of habit in the actual use of MDSA. Considering the unique and specific characteristics of MDSA, this study examines the antecedents of MDSA habit in an effort to elucidate key factors accelerating the development of MDSA habitual use. Data collected from 317 users who had prior experiences with MDSA were empirically tested against the research model using partial least squares (PLS). The analysis results indicate that both continuance intention and habit play an important role in the actual use of MDSA. Moreover, the findings reveal that habit is a more prevalent predictor of actual use compared to conscious intention. It was found that user satisfaction, perceived monetary value, and variety of use serve as the antecedents of MDSA habit. The theoretical and policy implications of the findings are described.
This paper progresses an analysis of what it means to be a cellular network operator and what form the ownership and control of future cellular networks may take. Alternative modes of ownership may allow for the creation of more flexible cellular networking environments in which competition for packages of resources, that is, the licenced spectrum, the RAN and core network, ensures that the most efficient and innovative architectures, services and applications are delivered to the consumer. This paper develops the concept of the Cellular Network Cloud and Utility Cellular Networking as a means to explore the possibilities for such revolution in the way in which cellular networks are owned and operated. Changes to current industry practices which would help to meet the objectives of more flexible and competitive network ownership and control are proposed.
An increase in economic development and globalization has led to an increase in Korean consumer expectations of socially responsible businesses. Nevertheless, Korean consumers are not highly aware of social responsibility issues in regard to their consumption nor are they conscious of current socially responsible activities by the corporations from which they are purchasing. Therefore, social responsibility practitioners need to understand the function of consumers’ perceived effectiveness in encouraging socially responsible purchasing in order to build strategic marking performance. The authors examine whether Korean consumers care about social responsibility by considering the relationship of perceived consumer effectiveness, motivational attitudes, and socially responsible purchase behavior. This study discovers the differential issues of personal attitude and social attitude on consumers’ ethical behavior. Implications and limitations are discussed.
Purpose
This study aims to analyze how the mobile virtual network operator (MVNO) market in Korea will evolve, the opportunities and/or threats of network operators and how the MVNO market will be forged in the future.
Design/methodology/approach
This study provides competitive analysis, market evaluation and current regulatory assessment of the Korean MVNO marketplace.
Findings
While there are many positive prospects of MVNO in Korea, a series of complicated techno‐economic issues arise.
Practical implications
The current development of MVNO sheds light on the growing challenges of the dynamics of industry, regulation and technology.
Social implications
While MVNOs continue to flourish in some markets, their diffusion in other regions is often very limited and continues to drastically decrease.
Originality/value
The results suggest a sustainable ecosystem of MVNO and propose an appropriate policy to promote MVNO diffusion.
Due to the governmentpsilas pro-competition policies, MVNO systems are emerging in Japan. In this paper, the author will evaluate the competition policy of the government encouraging MVNO system in the context of one-way access charge.
Mobile commerce (M-commerce) is a technological frontier and is an attractive area for research because of its relative novelty, rapid growth, and potential applications. Many contributions of this new discipline have explored and investigated the risks and challenges of m-commerce development, such as the startup problem of the markets, the challenges for 3G telecommunication operators, competition in the mobile telecommunications market and so on. This paper constructed a comprehensive framework to analysis the risks and challenges facing mobile network operator (MNO) or service provider (SP) from a review of recent contributions in the main international journals. This framework includes aspects of recent m-commerce research field such as environment, consumer, marketing, and finance. The result shows that there is a strong need to transfer the main interest of researchers from consumer adoption to a more comprehensive view.
The focus of this paper is to progress a discussion about the redefinition of what it means to be a cellular network operator. Alternative modes of ownership may allow for the creation of more flexible cellular networking environments in which competition for packages of resources, i.e. the licensed spectrum, the RAN and core network, ensures that the most efficient architectures win out. This paper introduces the concept of the Cellular Network Cloud and Utility Cellular Networking as a means to explore the possibilities for such revolution in the way in which cellular networks are owned and operated. As a step towards evaluating the technical feasibility of such a paradigm, a flexible auction model that enables us to auction spectrum as a continuous good, as opposed to a collection of discrete items, is presented.
Mobile virtual network operators (MVNOs) offer mobile telecoms services by purchasing capacity from mobile network operators (MNOs) and competing with the latter at the retail level. This paper employs a two stage model and analyses to what extent MVNOs may exert a competitive constraint on MNOs. In the first stage MNOs determine both their wholesale and retail capacities. In the second stage MNOs and MVNOs compete in the retail market. It is found that MNOs host MVNOs if and only if the latter do not exert a competitive constraint on MNOs’ retail businesses. Thus, absent access regulation, MVNO entry may happen but is unlikely to reduce consumer prices. The results do not depend upon the scarcity of capacity.
This study examines a comprehensive model of consumer acceptance in the context of MVNO by using the unified theory of acceptance and the use of technology model with constructs from the innovation diffusion theory such as compatibility, relative advantage and social influence. Structural equation modeling is used to construct a predictive model of attitudes toward the MVNO services. While the model confirms the classical role of technology adoption factors, the results also show that users' intention and usage are influenced by IDT factors. The proposed model brings together extant research on MVNO and provides an important cluster of antecedents to eventual technology acceptance via constructs of behavioral intention to use and to the actual MVNO usage. Policy implications of MVNO are discussed in terms of consumer marketing and market diffusion.
The purpose of this study is to examine cross-national data in order to identify possible factors related to the observable
patterns of Mobile Virtual Network Operator (MVNO) penetration. For this purpose, a mobile market structure is analyzed considering
economic factors related to the penetration of MVNOs. MVNOs have gained popularity in Western markets, but have a dismal track
record in non-Western regions. In comparing the different regions, this study analyzes how the MVNO market has changed and
what opportunities and/or threats network operators and potential MVNO entrants are likely to face. This study conducts an
economic assessment of market structure and the environment for different countries’ MVNO penetration, in order to compute
key indicators. Cluster/factor analysis tools are used to analyze the data on market structure in order to group countries
according to their market environments. In addition, regression equation analysis is used to investigate the relations of
MVNO penetration and independent variables. The results show that MVNO penetration significantly relates to market structure
and performance. These results also imply an appropriate policy to promote MVNO diffusion.
Since the introduction of competition in the telecommunication market due to the growth of the interconnection between heterogeneous networks, particularly fixed and mobile networks, the interconnection charge based on traffic-sensitive (TS) and non-traffic-sensitive (NTS) costs has become more important. Although there have been many studies of the public switched telephone network (PSTN), previous studies of TS and NTS costs in mobile networks are very few. In this paper, as a pilot study, we propose three criteria and a procedure for the classification of TS and NTS costs based on mobile systems. The three criteria are the following: function type, investment requirement, and main exhaust driver. Moreover, for a CDMA mobile system, strongly TS, strongly NTS, and mixed components are classified by the proposed criteria and procedure. The proposed criteria, procedure, and classification can provide a systematic and useful guideline to decide the scope of mobile facilities and to determine the terminating cost on mobile networks from fixed networks.
En la UE se ha estimado que los costes de la congesti�n representan el 2% de su PIB y que el coste de la poluci�n del aire y ruido supera el 0,6% del PIB, siendo alrededor del 90% de los mismos ocasionados por el transporte terrestre. Ante este hecho y el continuo aumento de la demanda del transporte privado frente al p�blico para los desplazamientos, muchos abogan por una conjunci�n de medidas tanto restrictivas como alternativas al uso del coche. Dentro de las primeras se encuentra el establecimiento de un peaje o una tarifa por el uso de las carreteras, medida que aunque desde el punto de vista de la Teor�a Econ�mica es la manera m�s eficiente para corregir el fallo de mercado que supone la congesti�n, desde la visi�n de pol�ticos y del p�blico no goza de gran aceptaci�n. En este trabajo se pretende hacer una simulaci�n de los efectos que tendr�a sobre el bienestar social de la implantaci�n de una medida de este tipo en la Bah�a de C�diz. In the European Union it has been estimated that the congestion cost are the 2% of the gross domestic product and the cost of pollution and noise is over 0,6%, olso it is known that the 90% of this cost are caused by overland transport. For this reason and for the always increasing demand of private transport, there are professionals who thinks that the solution have to be restrictive measures added to alternatives to the car. road pricing is a restrictive measures that for the economic theory is the most efficient way to solve congestion cost but for politicians and user of transport is not always accepted. In this study we are going to simulate road pricing for commuters in the Bah�a of C�diz and then it will be estimated welfare effects.
Observation of the effects of a handset subsidy on the mobile telecommunication industry has revealed two different aspects. The activation of various mobile services and the handset market, has led to the rapid acceleration of the related technological development, which is a desirable result, while rising prices and the overspending of related resources are undesirable. A great deal of research has been conducted to assess both desirable and undesirable factors using qualitative methods. However, quantitative studies into the effects of a handset subsidy are rare. In this study, we consider the positive and negative effects on consumer welfare of a change in demand and prices brought about by a handset subsidy. Then, we quantitatively compare the positive and negative effects and analyze their direct effects on consumer welfare.
This study aims to identify the factors that influence adoption intentions towards portable Internet service, based on the individual characteristics that assist in creating markets and developing strategies. Two types of factors are defined: individual characteristics including demographics, existing services usages, prior knowledge, adoption attitudes, and service evaluations; and adoption intentions including the willingness to subscribe, subscription term, willingness to pay, usage type, and preferred terminal. The results indicate that the importance of demographic variables depends on adoption intentions, and that users of mobile Internet service and wireless LAN are probably targets for portable Internet service. Furthermore, the results demonstrate the need for an enhanced perception of the usefulness and ease of use of service, as well as an intensive marketing activity for potential users and a bearable innovation to stimulate the market for portable Internet service.
This research is to substantially analyze the economic value of portable Internet (WiBro), WCDMA High Speed Downlink Packet Access (HSDPA), WiBro+VoIP, and WiBro+DMB regarded as the next generation of broadcasting. Based on the empirical analysis of economic values, we provide the optimal paths of converged communications and broadcasting services related to WiBro. 1,000 Internet users in the Seoul and Gyeonggi areas were surveyed in their homes. The collected survey was calculated as an accurate economic value distribution for relevant services, and the average and mean were taken using a parametric logit model, semi-parametric Spike model, and nonparametric Turnbull and Kernel estimations in order to analyze the contingent economic value of the amount offered to the subjects of the analysis. The contingent value analysis results varied slightly according to the different methodologies; however, an showed the following common features. The economic value of WiBro, Internet-based WCDMA, VoIP, and DMB with WiBro appeared to be similar. Therefore, if WiBro and WCDMA (HSDPA) form a competitive relationship, the types of bundled services offered as portable Internet service and the supply point of such bundled services are expected to emerge in a strategic plan for stimulating service markets and the prior occupation of the market.
The introduction of a mobile virtual network operator (MVNO) system is expected to increase consumer benefits, boost competition in the mobile market, utilize idle bandwidth, and expedite mobile-fixed line convergence and growth in the mobile Internet market. This research endeavors to study the optimal access charge for an MVNO system, which is expected to be introduced to the Korean mobile communications market. We found that the optimal access charge is higher in the interdependent model than in the independent model if demand for mobile phone service is based on a substitution relationship. We also found that the optimal access charge is higher than the marginal cost.
Abstract In this article, we analyze the incentives of mobile network operators to concede access to their networks to mobile virtual network operators. We develop a two-stage model, where in the …rst stage an entrant mobile,virtual network,operator,negotiates an access price with three incumbent mobile network operators, and in stage 2 …rms compete on Salop’s circle. The incumbents may be symmetrically or asymmetrically located on the circle, to re‡ect di¤erences in consumer shares. For some levels of asymmetry, the incumbents face a prisoners’dilemma with respect to conceding,access to their networks. Entry by a mobile virtual network operator may lead to lower retail prices. However, entry may also lead to higher retail prices for the host and for the entrant. Key Words: Mobile Telephony, Virtual Operators, Entry. JEL Classi…cation: L43, L96. ,, 1050-188 Lisboa, Portugal, e-mail: jppereira@oninetspeed.pt 1
On 21 June 2000 the Commission received a reference from the Treasurer on telecommunications-specific competition regulation for inquiry and report within 12 months of receipt of the reference. In conducting the review, the Commission was to have regard to the state of competition in the telecommunications market, and the impact of new technologies and delivery platforms. In making its recommendations, the Commission would aim to improve the overall economic performance of the Australian economy.
In this study we assessed minimum inhibitory concentration (MIC) values and resistance rates of several antibiotics in 65 primary and 324 secondary Helicobacter pylori isolates from Korean patients. Primary resistance to amoxicillin, clarithromycin, metronidazole, tetracycline, azithromycin, ciprofloxacin, levofloxacin and moxifloxacin was 18.5%, 13.8%, 66.2%, 12.3%, 32.3%, 33.8%, 21.5% and 21.5%, respectively. Secondary resistance was 31.3%, 85.1%, 70.1%, 0%, 89.6%, 35.8%, 32.8% and 32.8%, respectively. Sequence analysis of pbp1A in H. pylori strains with an amoxicillin MIC >or=2 microg/mL revealed C206T (Asp69-->Val), C1667G (Thr556-->Ser), A1684T (Asn562-->Tyr), A1777G (Thr593-->Ala) and C1798A (Pro600-->Thr) substitutions. Eleven (16.4%) of 67 treatment failures showed mixed infections with antibiotic-susceptible and -resistant H. pylori. The most common multidrug resistance profile was to clarithromycin, metronidazole and azithromycin. These results indicate that MIC values of secondary isolates were higher than those of primary isolates and that resistance to amoxicillin is probably mediated through mutations in pbp1A.
Virtual operators in the mobile network—A study of positioning strategies
- C J Klang
- R Martin
Klang, C. J., & Martin, R. (2001). Virtual operators in the mobile network—A study of positioning strategies. Stockholm: Royal Institute of Technology.
Economic spreading effect of the communication service industry
- H J Lee
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Lee, H. J., Moon, S. W., Kim, Y. G., Park, J. H., & Yoon, D. Y. (2002b). Economic spreading effect of the communication service industry. Korea Information Strategy Development Institute, Research Report 02-20, pp. 52–193.
Demand elasticity and consumer surplus estimation of the mobile telephony service
- Y G Kim
- H J Lee
- H J Kim
Kim, Y. G., Lee, H. J., & Kim, H. J. (2003). Demand elasticity and consumer surplus estimation of the mobile telephony service. In Proceedings of the 2003 joint economics academic seminar of the Korea Academic Society of Industrial Organization Program. Seoul.
Competition tools in the recent mobile telephony service market and direction for improving government regulation. Future-oriented competition policy in the future communication market
- J W Park
- I T Ahn
Park, J. W., & Ahn, I. T. (2004). Competition tools in the recent mobile telephony service market and direction for improving government regulation. Future-oriented competition policy in the future communication market. In Proceedings of policy seminar of the Korea Academic Society of Industrial Organization 2004 (pp. 129–131). Seoul. Productivity Commission. (2001). Telecommunications competition regulation, inquiry report, Report No. 16. Virgin Mobile. (2002). Virgin mobile attracts 2 million customers in record time, October 2. London: Virgin Mobile. /http:// about.virginmobile.com/aboutus/media/news/2002/2002-10-02/S. Virgin Mobile. (2005). Virgin mobile annual report & accounts 2005. London: Virgin Mobile.
Building successful virtual networks-MVNOs in the UK. News
- Analysys
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Analysys Building successful virtual networks-MVNOs in the UK. News
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Exact consumer's surplus and deadweight loss. The American Economic Review
- Hausman
Virgin Mobile Virgin mobile attracts 2 million customers in record time London: Virgin Mobile
- Virgin Mobile
Virgin mobile attracts 2 million customers in record time
- Virgin Mobile