Mobile Services in a Networked Economy

Mobile Services in a Networked Economy

Jarkko Vesa (Helsinki School of Economics, Finland)
Copyright: © 2005 |Pages: 7
DOI: 10.4018/978-1-59140-584-9.ch011
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Abstract

The mobile telephony business used to be reasonably simple in the past: mobile services were provided by national monopolies, so nobody really cared about building fancy brand images or creating funny names like Orange, O2, or 3. The service itself was well defined as it was all about being able to have a telephone conversation while being on the move. The services were targeted predominantly to an audience that consisted of “55-year-old male using mobile phone in his work” (Williamson, 2003, p. 20). But then came along deregulation which opened up the mobile market for new players that were forced to differentiate their services and image. The increasing competition lowered the prices of handsets and mobile phone calls to such an extent that even ordinary people (i.e., consumers paying for their own mobile phones and telephone bills) could afford their own cellphones. Roughly at the same time, somebody got the idea that you could send short text messages with your mobile phone — now as the digital mobile networks allowed for new kinds of value-added services. All of a sudden, the mobile business was not only about making phone calls; it was increasingly about communicating with friends, relatives, colleagues, and customers — either by voice or data messaging. It did not take long before the Japanese started to develop something totally new. NTT DoCoMo decided to create a new kind of mobile service that would focus on nonvoice services to consumers: the target audience was not the busy businessmen but their wives and children (Matsunaga, 2003). The new service called i-mode became extremely popular in a very short time, and soon, two other Japanese operators followed the example of NTT DoCoMo and created their own mobile Internet services. The European operators tried to replicate the success of the Japanese mobile operators in Europe, but they failed miserably. Despite the high hopes, WAP was a disaster for everybody involved: the users hated it, the operators could not make profitable business out of it, and the venture capitalists lost their investments as thousands of start-ups went bust. The European operators, and the industry in general, missed what is important in creating successful consumer services: mobile services business is not about technology — it is about building networks and ecosystems in order to be able to offer business customers and consumers total concepts that are both easy to use and also make their lives easier.

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