Tariffs constitute important decision making parameters in the marketing mix of mobile phone companies. Flat rates, as an example of such a pricing model, are decoupling the customers' usage and the generated revenue. This leads to commercial risks for telecommunication providers. The current price level for a data flat rate in conjunction with current technologies and usage patterns leads to high production costs and negative contribution margins. As an alternative concept, fair use flat rates lead to a limitation of use while also satisfying the typical customer usage patterns. Therefore, they are preferable to traditional flat rates. New production technologies such as LTE will not change this situation since they do not make customers more willing to pay. Instead, the motivation for the introduction of LTE is based on an improved cost situation for the telecommunication provider.
Abstract:Digital Video Broadcasting (DVB) using the same terrestrial infrastructure (DVB-T) as traditional analogue television has become a mature technology with a growing number of users. Different activities have been started (e.g. DVB-H) in order to apply that infrastructure for distributing multimedia content and interactive services to mobile devices. DVB (i.e. the television industry) and 3G mobile networks (i.e. the mobile telecommunications industry) are therefore becoming competitors from a value proposition point of view. On one hand there is the television industry with its close relation to the movie and media industry as well as its often advertising based business model. On the other hand there is the mobile telecommunications industry with its focus on direct revenue models for data and services (referred to as MCommerce), targeting on mobile subscribers. The paper will show that currently the television industry applies different business models more flexibly than the mobile telecommunications industry does. Looking at the likely upcoming competition between the both industries, the paper proposes an approach to expand the business model that is currently applied in the mobile telecommunications industry in order to make it competitive against broadcasted mobile multimedia services. As research in progress the paper addresses the question, which concepts could be applied in order to redesign the current M-Commerce business model for the sake of higher user adoption.
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