On Friday, October 12, 2001, at 05:36 , Michael Turner wrote:
> Seamless intercontinental roaming would be precisely that kind of
> commodification. It would expose telcos to something that most
> companies
> cringe at. Namely: unbridled cost competition.
The point was that those telcos have an interest to go for the tourist
market. Europe has a 53% market share in international tourism, which is
worth about 260 billion USD per annum.
To the telcos it doesn't really matter much where those tourists
originate from as long as they can win business from them and get a
slice of the pie. EU antitrust case or not, the egoism of mobile
operators to find new revenue streams will sooner or later make one
major network go new ways.
What's interesting about the "visited network charges" model is that a
network does not rely on any other network to support the scheme (at
least that's the case with ZEBRA). The network that deploys wins a
competitive advantage in their country by fetching business from
tourists. On the other hand, they have no guarantee that if they hold
back that another network elsewhere or one of their competitors will not
deploy either.
I know from reliable sources about one mobile consortium which has been
struggling lately and which has shown interest in the new model that
they don't care about the effects of possible cannibalisation of their
existing roaming business as long as they can gain a stronghold in the
tourist market.
And this is exactly the kind of context in which change is likely to
happen. One operator/consortium desperate for new business makes a start
and the others will have to follow eventually or loose out.
Besides, think Business class + Economy class. This is not about
replacing the existing roaming model with another. It is about
*complementing* the existing model with another in order to grow the
market.
Happened before in the airline industry in the sixties. There was no
economy class. Air travel was by definition first class and expensive,
only affordable to a few. Then with the emergence of mass tourism, the
industry saw an opportunity to grow their market by developing a new
service, now known as economy class. But first class and business class
air travel hasn't disappeared.
Similar is likely to happen in the roaming market. The exisiting service
model will live on as a premium service and an alternative model will
eventually emerge as a consumer service. The "visited network charges"
model is a strong contender to provide this consumer service.
rgds
BK
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Received on Fri Oct 12 12:42:17 2001