The adoption and diffusion of mobile services has achieved a spectacular growth in many countries around the world. However, regulators in these countries are finding that existing regulatory frameworks are not suitable for dealing with these services. This chapter employs qualitative evidence to investigate how regulation and legislation can affect mobile services in the Australian mobile telecommunications industry and draws from it to propose an innovative regulatory framework. The framework is comprised of five major components: consumer and intellectual property protection, market and resources access, and environmental protection. We argue that these encompass the interests of the stakeholders operating in mobile industry and given its dynamic and complex nature co-regulation is an effective approach that can be used to minimize costs and enhance compliance.
With the advent of broadband wireless networks, the number of 3G subscribers is predicted to rise to nearly 800 million worldwide by the end of 2010 from 70.6 million recorded at the end of 2005 (Informa, 2005b). In addition, many markets have surpassed the 100% handset penetration and in those markets mobile users are attracted to new and compelling mobile services (Mylonopoulos & Sideris, 2006; Steinbock, 2005). These market conditions provide a conducive environment for delivering increasingly sophisticated mobile services which constitute a substantial source of potential revenue growth for the stakeholders of the mobile telecommunications industry (Alahuhta, Ahola, & Hakala, 2005; Kumar, 2004; Massey, Khatri, & Ramesh, 2005).
A mobile service can be defined as an activity or series of intangible activities that occur when mobile consumers interact with systems or service provider employees with the support of a mobile telecommunications network (Bouwman, Haaker, & De Vos, 2007; Van De Kar, 2004). Examples of mobile services include mobile e-mail, SMS and MMS services, content downloads, mobile ticket reservations, mobile stock trading, and mobile TV (Bina & Giaglis, 2005). Mobile services are complex and require the integration of diverse technological and organizational resources which typically cannot be found within a single organization. Consequently, the knowledge necessary for developing and deploying these services may involve several heterogeneous stakeholders who are often embedded in various technological, economic, and social settings. In order to succeed, these stakeholders must interact with each other while complying with legal and societal requirements that balance their diverging interests, motivations, and needs (Camponovo & Pigneur, 2003). These requirements constitute a regulatory regime which, by definition, can operate at either industrial, national or international levels and can influence, direct, limit or prohibit any activity undertaken by stakeholders operating in the mobile industry (Yoo, Lyytinen, & Yang, 2005). Typically, regulatory regimes are set by regulatory and legislative authorities including government agencies, industry and consumer associations.
Combined with the complexity of stakeholder interactions, regulation has the potential to affect the offerings and the uptake of mobile services (Kijl et al., 2005; Sangwan & Pau, 2005). Credible and transparent regulatory rules can boost investments in the industry, promote public confidence and the development of innovative and affordable mobile services while stimulating industry research and development efforts (Verikoukis et al., 2006). However, regulation can also impact the industry in a negative way. Increasing regulatory compliance fees for stakeholders can increase the overall cost of operation well beyond that of acquiring the technology itself (Tongia, 2007).
As the mobile services industry matures, it is attracting the attention of policy makers and consumer advocacy groups that are increasingly focusing on its regulation (Woolfson, 2005). MacInnes (2005) argues that when a service technology “has reached some minimum standard of performance and reliability one needs to be concerned with societal, legal, and general economic factors. This is a stage that is generally overlooked because it is not until a technology has been commercialized that the originators realize the problems that the technology poses to society in general. … A successful implementation of a business model around new technologies would have to consider those potential obstacles and provide solutions.” (p. 7).
Key Terms in this Chapter
Environmental Protection: Environmental protection is concerned with how developments in the mobile industry affect the environment.
Regulatory Regime: A regulatory regime represents any type of authority which can operate at either industrial, national or international levels and which can influence, direct, limit or prohibit any activity undertaken by any stakeholder operating in the mobile telecommunications industry (Yoo, Lyytinen, & Yang, 2005).
Intellectual Property Protection: Intellectual Property Protection refers the use of copyright, patent, trademark, digital rights management (DRM) and electronic licensing schemes for protecting intellectual property rights associated with mobile services provisioning.
Contractual Relationships: Contractual Relationships refer to protecting the contractual bilateral relationships between supply- and demand-side stakeholders. This includes protecting end-users in their relationships with mobile network operators with mobile retail tariff regulation, mobile number portability, and product and billing disclosure.
Co-Regulation: Co-regulation represents a regulation approach by way of which government regulations collaborate closely with the industry in terms of a mixture of direct intervention through legislation on the one hand, and complete self-regulation on the other.
Market Access: Market Access is concerned with accessing markets with appropriate mobile frequencies and obtaining the required operational licenses. It also includes competition and antitrust legislation which is aimed at ensuring that competition is not distorted and, as a consequence, consumers receive quality mobile services.
Mobile Services: A mobile service is an activity or series of intangible activities that occur when mobile consumers interact with systems or service provider employees with the support of a mobile telecommunications network (Bouwman, Haaker, & De Vos, 2007; Van De Kar, 2004). Examples of mobile services include mobile e-mail, SMS/MMS services, content downloads, mobile ticket reservations, and mobile TV.
Privacy: Privacy is the right of individuals to be left alone and to exercise control over one’s personal information. Privacy includes information privacy which represents the way in which organizations handle an individual’s personal information.