Regulating Mobile Services: An Institution-Based View

Regulating Mobile Services: An Institution-Based View

Indrit Troshani (The University of Adelaide, Australia) and Sally Rao Hill (The University of Adelaide, Australia)
Copyright: © 2011 |Pages: 19
DOI: 10.4018/jebr.2011010104
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Abstract

While the development of mobile services is experiencing a spectacular growth in many countries worldwide, existing regulatory regimes are ill equipped for dealing with them. In this paper, the authors use qualitative evidence to investigate the manner in which institutional regulatory factors, including legal, societal, and economic factors, can impact mobile services in the Australian mobile telecommunications industry. These factors are important as they shape both the nature of emerging mobile services and their diffusion trajectory. The investigation culminates with an innovative institutional regulatory framework that includes factors such as consumer and intellectual property protection, market and resources access. The authors argue that co-regulation, a mixture of direct monitoring and intervention of regulators through legislation and complete industry self-regulation, is an effective approach for regulating the mobile telecommunications industry. Given the complex and dynamic nature of this industry, co-regulation can minimize monitoring costs and enhance compliance.
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Introduction

Mobile technologies and services are heralded to create a tremendous spectrum of business opportunities (Liu, Huang & Chen, 2008). The rapid proliferation of mobile devices, including mobile phones, PDAs, and handheld computers, is considered to be a driving force for next-generation m-commerce (Bouwman et al., 2007; Carlsson, Walden & Bouwman, 2006; Lin & Liu, 2009; Tsai, Lo & Chou, 2009). 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 revenue growth for the mobile telecommunications industry (Massey, Khatri & Ramesh, 2005; Rao Hill & Troshani, 2010; Troshani & Rao Hill, 2009a).

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). 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). Delivering mobile services requires the integration of diverse technological and organizational resources which typically cannot be found within individual organizations. Consequently, the knowledge necessary for developing and deploying these services may involve several heterogeneous stakeholders that are often embedded in various technological, economic, and social settings. In order to succeed, these stakeholders must interact with each other while complying with institutional requirements including legal and societal requirements that balance their diverging interests, motivations, and needs (Camponovo & Pigneur, 2003; Rao Hill & Troshani, 2010; Troshani & Rao Hill, 2009a). These requirements constitute a regulatory regime which 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 (Tongia, 2007). Furthermore, excessive regulation can act as a barrier by hampering innovations that technological development can make possible (Fisher & Harindranath, 2004; Folger, 2001).

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