A value chain perspective on the economic drivers of competition in the wireless telecommunications industry

Abstract

We address aspects of uncertainty brought about by the rapid pace of change in the wireless telecommunications industry. We draw upon elements of value chain theory in developing a systematic historical perspective on these changes in wireless telecommunications. We draw upon elements of classical economic theory in understanding the dynamics driving these changes. A System Dynamics model is constructed to bridge the theoretical and empirical gap between value chain theory and classical economics. We use this model to understand the dynamics of possible future changes in the wireless telecommunications industry. Model validation results show that our economic and value chain analyses are insightful in explaining the growth, innovation paths, and competitive dynamic of wireless communications value chain participants.