Strategic Differentiation of Internationalization in the Mobile Telecommunications Industry: Case Studies

Abstract

We present a unified explanation of the internationalization strategies of major mobile network operators (MNOs). We have developed a framework that analyzes the strategies of major international MNOs in terms of the relationship between their degree of involvement in international business operations and the degree of equity participation. The results show a positive association between these two dimensions as expected, but they also reveal some exceptional cases in which certain MNOs are actively involved in the business operations of other foreign MNOs, even with minor (or zero) equity investments. In this paper, we argue that the strategic actions of the major MNOs which are the largest shareholders of foreign MNOs are in an equilibrium status because these major MNOs derive maximum benefit from full or considerable management control and active involvement. Finally, we predict that latecomers (MNOs who are just about to enter foreign telecommunications markets) may adopt an incremental investment approach because most developed markets and deregulated emerging markets with growth potential are already preempted by major MNOs. Therefore, the window of opportunity for internationalization in those markets is currently small.

Internationalization of mobile telecommunications: a systematic literature review

“…The findings of the reviewed literature are so varied that categorizing them into themes was a challenging process, consistent with the argument that the international expansion of mobile telecom firms is characterized by a diversity of factors, making it a difficult process to understand (Kim et al, 2009). The use of the Antecedents-Phenomenon-Outcomes logic is intended to provide a holistic overview and a clearer understanding of what the literature reports regarding the internationalization of firms in this industry.…”

“…Key motivators for internationalization among mobile telecom firms include business-friendly regulatory regimes and market environments in potential host countries (Kim et al, 2009;Clifton et al, 2011); increased competitive pressures at home, associated with diminishing growth potential, increasing subscriber acquisition costs and shrinking average revenue per user (Graack, 1996); and previous international experience (Pogrebnyakov, 2007;Eggers et al, 2012). Additional forces driving mobile operators into foreign markets are the quest for establishing an international presence, consolidating subscriber bases for growth (Clegg and Kamall, 1998;Kim et al, 2009), leveraging the ownership advantages developed through domestic operations (Gerpott and Jakopin, 2005), exploiting first-mover advantages (FMAs) (Sarkar et al, 1999;Bijwaard et al, 2008;Jakopin and Klein, 2012) and faster return on investment (ROI) (Ahmad, 2014). MNOs are further prompted to internationalize by their desire to earn economies of scale and scope (Stienstra et al, 2004) and to acquire knowledge (Clegg and Kamall, 1998).…”

Cross‐border expansion and competitive interactions of indigenous mobile network operators in sub‐Saharan Africa

“…The literature identifies several factors as having driven internationalization among MNOs. In addition to previous international experience of the firm, business‐friendly host‐country regulatory and market environments (Clifton et al, ; Kim et al, ), which served to heighten competitive pressures in domestic markets (often due to diminishing growth potential), increasing subscriber acquisition costs, and shrinking average revenue per user (Eggers, Grajek, & Kretschmer, ; Graack, ; Pogrebnyakov, ) rank among the major drivers.…”

“…Internationalization in the mobile telecom industry was also the outcome of other forces, including the quest to establish an international presence and consolidate subscriber bases for revenue growth (Clegg & Kamall, ; Kim et al, ). The desires to leverage knowledge and expertise—or ownership advantage—acquired through domestic operations (Gerpott & Jakopin, ), exploit early‐mover advantages (Bijwaard, Janssen, & Maasland, ; Jakopin & Klein, ; Sarkar et al, ), and achieve prompt return on investment (Ahmad, ) were additional motivators.…”

“…The mobile telecom industry has some quite specific characteristics that affect firms' expansion and competitive behaviors. This is a strictly regulated industry with high entry barriers (Bourreau & Doğan, ; Clifton et al, ; Nicolaides, ; Sarkar et al, ), offering services that are very technology oriented (Ferreira Ribeiro, Oliveira De Miranda, Borini, & Bernardes, ; Johansson, ; Kim, Lee, & Kim, ). The number of MNOs operating in most countries is quite low, creating a highly concentrated environment (Gruber, ; Gruber & Verboven, ).…”