Conclusion and Future Directions

Understanding Position and the Resource Pool

In the mobile business, positioning oneself in the competitive landscape is of utmost importance. Increasing pressures for revenue generation characterize the current, emergent phase of this industry. For all industry actors, this leads to seeking more sales or more efficiency through their own efforts and via joint activities. This calls for implementing relationship "orchestration," based on internal and potential partner's resources, and seeking competitive advantages via efficient resource utilization as well as creative resource blending.

The main challenge for several pioneering mobile Finnish companies was to obtain and allocate their resource pools to match ambitious growth strategies. High risks were taken in business expansion, often beyond the limits of the firm's control. A few firms benefited from being among the first movers within the mobile arena, but for many, these risks became overwhelming. In this dynamic and emergent period, the mobile industry keeps transforming, quarter to quarter; only time will tell which of the Finnish m-business companies will survive in the long term.

Identification of Crucial Partnerships and Activities

Planning and implementation of network-based business operations can be challenging. The mobile business-network framework presented in this chapter is geared to help companies and researchers identify and analyze the market positions of key actors. The business-network diagramming and assessments can be used to map the firm's own position and the positions of external actors, resource profiles, business activities, and partnering actions. The partner search should not be confined to the traditional geographical limits of the company. Instead, strategic match seeking should be extended to international markets. This is especially necessary for m-business companies based in small economies, such as in Finland.

In most global markets, the mobile telecom operator holds the pivotal position for revenue generation. In some countries, the dominant actor can also arise from other parts of the value-web, such as device and equipment maker Nokia in Finland. In the converging ICT landscape, important strategic positions can also arise from surprising areas, such as the success of TV channels in SMS+TV+Chat solutions. [11] The telecom operators, however, have the most entrenched customer base, functioning billing systems, and understanding of consumers' mobile phone usage patterns. In addition, the operators operate their own or leased mobile networks. For mobile start-up success, creating smooth-functioning relationships with operators is undoubtedly a key requirement. If a start-up cannot provide sustainable revenue generation streams from the operators' end users, then it cannot be viable in the long run.

An alternative to sustained operator relationships is to have a short-term business focus with aggressive marketing and brand creation. During the ICT hype of the 1990s, these kinds of operations were sufficient for start-ups. In the future, the situation will be far more challenging. M-commerce firms need to show recurring returns on investment, not only short-term revenue potential but also sustainable long-term revenue streams.

Mobile Earnings Logics

Multiple revenue-sharing-based business models were already tested across global mobile markets. Yet, pioneering experience from Finland showed that the trend is from complex business models to simpler ones. Advertising, subscription fees, and transaction commissions remained the main revenue generators. Early experience indicates that business models based on shared micropayments (sharing the end users' fractional euro/dollar payments for ring tones or icons) are challenging to administer and sustain. As content aggregators, mobile media (portals) benefited from such micropayment-based revenue, but the revenue passed backward to individual content creators or application vendors has been marginal. The start-ups were given only minimum shares of the possible revenue from mobile innovations that these start-ups created and made available to the portals or operators.

As mentioned frequently in this chapter, controlling customer information is critical for market position improvement. The actors that can actually send the bill to the end user—mostly telecom operators—hold the key role in the mobile value-webs. Regardless of technological development, this reality will not change. Mobile start-ups sometimes aim to bypass the telecom operators by offering their own access gateways and service portals. Yet, obtaining a critical and sustainable mass of paying customers for such specialized gateways is not easy. Telecom operators, regardless of their current downturn, have deep pockets to fund the high investment costs required for m-commerce operations. Start-ups, especially after the crash, are struggling with their survival and are thus in very weak competitive positions. Telecom operators may end up acquiring innovative, but resource-starved start-ups at bargain basement prices not reflective of the long-term value of such start-ups.

By 2000, throughout the mobile industry landscape, actors started facing harsh economic realities. The time for hype was over; and the mobile industry was becoming a business similar to any other business. Free lunches—in the form of fast and loose venture capital—ceased to exist, and business models with long-term viability became keys to success. The Finnish experiences outlined in this chapter, along with concepts from business network theories, should help m-commerce players make their business models viable and robust.

[11]See, e.g.,,, or

Wireless Communications and Mobile Commerce
Wireless Communications and Mobile Commerce
ISBN: 1591402123
EAN: 2147483647
Year: 2004
Pages: 139 © 2008-2017.
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