The evolving nature of competition in the wireless ecosystem : emergent opportunities and threats

Abstract

By the end of 2008, there are over 4 billion mobile cellular subscriptions worldwide, translating into a penetration rate of 61%. In developed economies like the United States, the penetration rate has reached over 85%. Even though the subscriber numbers are reaching saturation levels, the revenues of mobile operators continue to grow at a double-digit rate. This is primarily because of an increase in data usage over cellular networks. Mobile handsets have become increasingly powerful and rival the capabilities of personal computers from just a few years ago. These devices can be used to run a variety of applications and are fast becoming the medium of choice for accessing the Internet. Cellular networks are also becoming increasingly powerful in their ability to carry large amounts of data. This evolution in capabilities has attracted a variety of new players to the wireless ecosystem changing the nature of interaction within the ecosystem. The central role played by the wireless operators is increasingly challenged by these new entrants creating both new opportunities and new threats for all the participants in the ecosystem. This thesis will explore the structure of the wireless ecosystem as it exists today and analyze how competition between various layers and within each layer has played out. Further, it will look at the new ways in which the participants are competing with each other and how this results in emergent opportunities and threats. Finally, the thesis will draw lessons from the Internet revolution and the personal computing ecosystem to predict how the platform wars are likely to play out and who has the opportunity to become the dominant player in the new ecosystem.