Mobile Electronic Commerce

345

chapter seventeen

Mobile content and

applications value networks

Evidence from the Italian mobile

telecommunications market

Antonio Ghezzi, Raffaello Balocco, and Andrea Rangone

17.1 Introduction

The mobile telecommunications industry has a relatively short but

undoubtedly intense history, made of signicant advancements at both the

infrastructure and service levels. On a network standard level, the indus-

try evolved through a well-orchestrated multistep transition from global

system for mobile communications (GSM) to general packet radio service

(GPRS) and universal mobile telecommunications system (UMTS), which

is currently leading to the development of 4G—the so-called long-term

evolution (Barnes, 2002; Li and Whalley, 2002; Ballon, 2004; Ibrus, 2013).

At the same time, on a service level, the innovation initiative of mobile

network operators (MNOs), device manufacturers (DMs), and a growing

Contents

17.1 Introduction ...........................................................................................345

17.2 Literature review on value networks and strategic networks ........ 347

17.3 Research methodology ......................................................................... 349

17.4 Mobile content and applications value-adding activities ............... 351

17.5 Mobile content and application value network alternative

conguration ......................................................................................... 353

17.5.1 Full-walled garden conguration...........................................354

17.5.2 Intermediated content delivery conguration ..................... 355

17.5.3 Full open garden conguration .............................................. 357

17.5.4 Technology and service provider conguration .................. 359

17.5.5 Device manufacturer–driven conguration ......................... 362

17.6 Conclusions and future works ............................................................ 363

References ........................................................................................................364

346 Mobile Electronic Commerce

set of third parties catalyzed the development of a wide and appealing

offer of value-added, nonvoice mobile digital media services—which

include handset browsing, mobile social networking, mobile applications,

mobile games, mobile music, mobile video, mobile TV, ringtones, wallpa-

pers, and infotainment alerts—pertaining to the so-called mobile content

and applications market segment (Peppard and Rylander, 2006; Kuo and

Yu, 2006; Jung etal., 2013).

The mobile content and applications market relevance in the overall

mobile telecommunications landscape is rising dramatically, as analysts

expect its global value, only partially hindered by the ongoing recession,

will exceed $140 billion by 2014 (Idate, 2012).

Within the global Mobile Telecommunications, Italy holds a key

position, thanks to its world’s highest service penetration and diffusion

rates; its positioning at the forefront in industry innovation at the global

level; and the strong international presence of its key players (Idate, 2012;

Informa, 2012).

As the market grows and its structure evolves, involving a larger num-

ber of heterogeneous rms—characterized by rm-specic activities per-

formed—and giving rise to a complex set of relationships between them,

the need of rigorously identifying and consequently analyzing its consti-

tutive value-creating or value-destroying activities has emerged, deserv-

ing attention from both researchers and practitioners. In particular, given

the complexity of the aforementioned interrm links and of the resulting

thorough value system structure, the present study claims that the activity

analysis process should benet from the adoption of a value network per-

spective, which extends the traditional value chain model through a refo-

cus on interorganizational, nonsequential, and multilayered relationships.

Therefore, the study aims at identifying which are the core activities

that constitute the mobile content and applications market, how they are

interrelated, and how they can be internalized and combined by different

market players to dene and shape their value domain.

Conceptually, this is achieved through applying the value network

and the strategic network theoretical frameworks to the Italian market

for mobile content and applications. Since different activity combinations

within a given key actor’s perimeter may arise, ve alternative congu-

rations of mobile content value networks are provided— characterized

by different roles of the involved actors, in terms of activities covered—

representing the most signicant cases that emerged and could be

inferred from the information collected through the literature review and

the empirical analysis, based on multiple case studies. As a nal step of

the research, coherently to the perspective taken, the proposed congu-

rations are evaluated with reference to a set of key variables or drivers

derived from value networks and strategic networks theories, in order to

delineate and compare their different characteristics.