Table of Contents
1 Introduction 7
2 Business models: a framework 8
2.1 Typology of business models 8
2.2 Construction of business models 9
3 Current and emerging wireless business models 12
3.1 The wireless value system 12
3.2 Wireless services in 2 and 2,5G 13
3.2.1 The wireless migration path 13
3.2.2 From e-business to m-business models 15
3.2.3 Service characteristics 16
3.3 Wireless value networks in the Netherlands 19
3.3.1 Actors and activities in the Dutch market 19
3.3.2 Interactions and hierarchies 22
3.4 Current and emerging wireless business models 23
4 Towards business models for UMTS services 28
4.1 UMTS characteristics 28
4.2 UMTS service scenarios 31
4.3 Conclusion 34
G I G A M O B I L E / D 1 . 3 V
Mobile Internet has been a buzzword for the last couple of years. However, due to the
problems facing telecom operators today, the uncertainty and anxiety about the advent and
success of mobile Internet have grown considerably. This paper argues that the main causes
for this are the uncertainties surrounding the business models for 2,5 and 3G mobile services.
In response to this, this paper presents the findings of research by TNO-STB on emerging
and future business models for mobile voice and data services .
The paper starts with a concise discussion of recent theory about business models, showing
which approach to business models may be fruitful in order to respond to the uncertainties
Next, it presents an analysis of current and emerging voice and data services and their
underlying business models. This analysis is based on the situation in the Dutch market. It
shows the most prominent business models for 2 and 2,5G services and outlines their main
Finally, the last part of this paper sketches a number of 3G service scenarios and assesses to
which extent 3G business models might differ from present and emerging models.
The authors acknowledge the input of Henk-Jan van de Meeberg, who, at the time of writing this paper, was
finishing a traineeship at TNO-STB.
2 Business models: a framework
In current literature and practice, there are various ways in which business models are
defined and used. Traditionally, a business model describes the external organisation of
commercial transactions between organisations. Transactions include the exchange of
information, goods, services, money, contracts, and knowledge. Such activities are described
in a business model.
In recent years, the concept of a business model has developed and has been used in a
wider sense to encompass all the mechanisms involved in the generation of revenues from
the sale of goods and services. The business model has become a means of structuring
various cost and revenue streams so that business becomes viable, usually, but not
necessarily, in the sense of being able to sustain itself on the basis of the income it generates
(Hawkins, 2001). So, business models are not only used to describe external transactions, but
also internal processes concerning the production of a good or service and the various
business roles the actors play in this process. In fact the whole value chain of a good or
service is described in a business model, combined with the revenue streams that make the
In this paper, we will use the following definition of a business model: a description of how a
company or set of companies intend to create value in the marketplace. A business model
describes the architecture for a product or service and the related information flows, including
a description of the various business activities and roles. Besides this, a business model
defines the potential benefits for the various business actors and the sources of revenues
2.1 Typology of business models
There are several types of business models, depending for instance on their focus or range,
their function or goal. First of all, a distinction can be made between business models that
describe the business activities of a firm or a group of firms, and business models that
concentrate on one specific product or service.
Secondly, a distinction can be made between business models describing the roles of various
actors involved in a business process, and on the other hand business models that focus on a
calculation of costs and revenues. The latter are usually referred to as revenue models. They
include assumptions about financial gains and expenditure and will often aim at establishing
the profitability and the break-even point of products or services.
Another distinction is the one between business models and business cases, where the
business case is the specific application of a business model for an individual company in a
8 G I G A P O R T
Finally, a distinction can be made between strict business models and business scenarios. In
this view, business models provide a more or less static representation of a specific
configuration of a value network and the corresponding revenue streams. Business scenarios
are more dynamic and forward-looking, concerning themselves with the potential impact of
trends on different business models.
Business models can also be characterised by their function or goal. In economic literature
the following functions of business models are mentioned:
· To articulate the value proposition: the value created for users by the offering based on
· To identify the market segment: the users to whom the technology is useful and for what
· To define the structure of the value chain within the firm required to create and distribute
· To estimate the cost structure and profit potential of producing the offering
· To describe the position of the firm within the value network linking suppliers and
customers including identification of potential complementors and competitors
· To formulate the competitive strategy by which the innovating firm will gain and hold
advantage over rivals.
Currently, there is great uncertainty about the value proposition behind next-generation
mobile services, not only regarding user adoption or revenues for a specific service, but even
about which services to offer, which networks to form, and which activities and roles to
perform or to outsource. Therefore, a general approach, outlining potential business roles,
relationships and hierarchies in networks, is in order. Rather than on specific firms, the
business models presented here focus on general services. Rather than on quantitative
models, they aim at making structures apparent, and adopt a scenario approach. The next
paragraph looks at the components of such business models and presents a framework for
constructing and analysing them.
2.2 Construction of business models
A first step in constructing a framework for business models is to examine the creation and
exchange of value in more detail. Traditional economics considered tangible production
factors such as land, capital, and labour to be the main assets for value creation. However,
during the last decades, the importance attached to intangible assets such as knowledge,
trust relationships, intellectual property, and leadership has risen considerably. These
intangibles are more and more being incorporated into business models (Boulton, Libert &
Also, in the past, it was customary to think of the process of creating and exchanging value as
a linear process. This idea has largely been abandoned, resulting in a shift in terminology
from value chains to value networks. The traditional value chain is focused at the level of the
firm with the objective of linking business strategies to the characteristics of actual products. It
describes the activities connecting a company’s supply side (raw materials, inbound logistics,
and production process) with its demand side (outbound logistics, marketing and sales) in a
linear way (Timmers, 1998). With the growing use of ICT in production and business
processes, interdependence between firms has become an important factor, leading to the
rise of the so-called network economy. As a result, the value chain concept is focussing more
and more on the value-added relationship between the different participants involved in the
process of production and consumption.
Moreover, this relationship has in many ways become more dynamic and flexible. As the
Internet, along with other digital information and communication means, allows production and
business processes to become faster, more flexible and more transparent, this has rendered
possible a higher complexity and flexibility of linkages between firms. Also, virtual organisation
structures have appeared which are characterised by flatter hierarchies and a more flexible,
team-based work organisation in order to respond quickly to changes in the business
environment and customer demands. Finally, there has been a shift from supply-side thinking
to a more demand-side oriented approach all the more because of the interactive possibilities
of new ICT. For all these reasons, the value-chain concept has been gradually replaced by
the concept of value ‘networks’ or value ‘systems’ (Bovel & Martha, 2000).
Such a value network describes the creation and exchange of value through the interaction
between actors, characterised by different relationships and hierarchies, within a networked
environment. These elements provide the main components for the construction and analysis
of a business model as it is conceived in this paper:
· Actors in a value network can be suppliers, producers, intermediaries or users of a certain
good or service. They can be independent entities as well as business units within a firm.
· The interaction between the originator and the user (organisation or consumer) of specific
goods or services can be conceptualised as a direct or an indirect transaction (by means
of intermediation). The interaction can exist of the exchange of information or trust as well
as of economic transactions.
· If these interactions are repeated and become recurrent, relationships and linkages are
formed. These relationships allow the different actors to combine their productive and
innovative potential. They shape the value network and constitute the setting for the
business models that originate in these networks.
· The relationships between actors are not power-neutral. Assets are not evenly spread
over all players in a value network. This unbalance has even become more important than
before, as it potentially effects a much larger number of players. This means that the
analysis of hierarchies and power relationships remains vital in understanding the
10 G I G A P O R T
business process. According to Håkansson & Johansson (1992), the elements defining
relationships and hierarchies between actors are functional dependencies, power
structures, knowledge structures, and time dependent structures.
These elements need to be considered when constructing a business model. Business
models are created by stepping back from the business activity itself to look at the underlying
structures that make the product or service commercially viable. They are important in
understanding the context and strategies of the different players in a market. A systematic
approach for identifying architectures for business models can be value chain (or network) de-
construction and re-construction (Timmers, 1998). In order to assess the viability of potential
business models for future 3G services, this is to be complemented with a scenario approach.
Not only a calculation of revenues and expenses is needed, but even more so an assessment
of present strategic, technological and consumer trends.
The approach of this paper is as follows:
· Value chain or value network deconstruction: identifying the different elements of the
value chain or network involved in the production and consumption of certain goods and
· Identification of services and their characteristics.
· Identification of actors, interaction patterns, and hierarchies.
· Value chain or value network reconstruction: the integration of the different actors and
interaction patterns to form a commercially viable business model.
· Assessing the impact of future trends and developments on the business models.
3 Current and emerging wireless business models
This chapter explores the current and emerging business models for wireless services in the
Netherlands. In the first paragraph, the wireless value network is deconstructed into its
different functional chains. The next two paragraphs examine the main influencing factors on
current business models. In the second paragraph, some characteristics of 2 and 2,5G
services are analysed. The third paragraph provides an overview of the relevant actors, their
interactions and relationships in the Dutch mobile market. Finally, the main business models
behind wireless services today are reconstructed.
3.1 The wireless value system
A report by the Yankee Group (2000) provides a basis for deconstructing the value network
for wireless services. This report describes a value network existing of five major value
chains. These refer to:
· Network Transport. Traditionally, network operators have integrated the whole network
operating value chain, consisting of spectrum brokerage, mobile network transport, and
mobile service provisioning. They are often labelled as gatekeepers, both in terms of
customer ownership and in terms of ownership of limited resources such as spectrum and
· Applications Operation. The application environment includes application developers,
systems integrators, and applications operators. Companies that bundle these activities
are also labelled wireless application service providers (WASPs).
· Content Provisioning. This value chain consists of content providers, content aggregators
and portals. Portals also serve as wireless Internet service providers (WISPs), as they
become the gateway to Internet content.
· Payment Processing. Traditionally, network operators have had the only billing
relationship with the client.
· Providing Device Solutions. Handset vendors are a well established part of the mobile
value system. They provide hardware as well as software solutions.
In addition, there are two ‘enabling’ value chains involved:
· Network Equipment Provisioning. Companies providing network equipment are e.g.
Ericsson, Nokia, Motorola, Alcatel, Nortel. Traditionally, infrastructure vendors provide a
relatively standardised product.
· Middleware/Platform Provisioning. Examples are WAP gateways, SMS gateways, mobile
portal platforms, mobile commerce platforms, and other applications platforms.
12 G I G A P O R T
The resulting value network is portrayed in figure 2-1.
WISP ortal /
nd uip Payment Processor
Mobile Network Mobile Service
Spectrum Broker Transport Provider Provider by
Customer / Device Solutions
/ Carrier - Providers HW/SW
lew n Facing
idd m Ve
l at Operator
Figure 3-1 Wireless Value System
Source: TNO-STB, based on The Yankee Group (2000)
This schematic representation will be used throughout this paper in order to describe the
different roles performed by the players active on the Dutch market, as well as the business
models they use. Companies determine their business model by bundling different elements
of these value chains and by (re)designing their interactions with other parties in the wireless
access value system, including the customers. Shaping these business models are the
characteristics of current and emerging wireless services, as well as the relevant actors, their
interactions and relationships. These are examined in the following paragraphs.
3.2 Wireless services in 2 and 2,5G
3.2.1 The wireless migration path
After the introduction of Global System for Mobile communications (GSM), a tremendous
growth in the area of wireless communication took place in Europe. During the second half of
the nineties, data services based on the Internet protocol have turned out to be another very
successful innovation in the field of communication and information. Increasingly, new mobile
data services are merging mobile telecommunications and data communications. However,
data services in cellular systems have traditionally been secondary services. As a result,
existing GSM data services are piggy-backing on the existing circuit switched mobile network
with a maximum speed of 9.6 kbps.
The first major move towards “mobile Internet” is labelled General Packet Radio Service
(GPRS), introducing packet switching as an overlay to the circuit switched GSM networks by
introducing new elements in the GSM-infrastructure, as well as new software in some existing
elements. The packet switched nature of GPRS doesn’t only increase the capacity for data
transmissions but also makes possible an immediate and constant connectivity to external
networks such as Internet and Intranet, without repeatedly having to carry out a time
consuming setup procedure. Furthermore, the GPRS system incorporates new billing
concepts, such as paying for the volume of transmitted data, rather than for the time of the
data-connection. 2001 is the year of the introduction of GPRS services on the Dutch market.
Three out of the five mobile operators have announced concrete plans for this, i.e. Telfort
(O2), Libertel-Vodaphone, and KPN Mobile.
A second technology for upgrading GSM networks is EDGE (Enhanced Data rate for GSM
Evolution). Both GPRS and EDGE offer a more cost-effective approach to accessing data
networks, such as IP-based networks. A second advantage is that EDGE offers an IP platform
independent of communication standards.
Today’s second and the second and a half generation mobile network standards will be
gradually replaced by the third generation Universal Mobile Telecommunications System
(UMTS). The UMTS standard is intended to enable multimedia services, as well as to unify
the disparate standards of today’s wireless networks. However, due to amongst others the
blocked 3G spectrum in North America, it isn’t possible to upgrade to a uniform 3G-network
on a worldwide scale right now.
There is not one fixed standard of UMTS but there are several releases, each introducing an
improvement to its predecessor. For example, UMTS release 4 (99) offers an option to use
either IPv4 or IPv6 as transport protocol and specifies that either permanent or temporary
allocation may be used. In UMTS release 5 the most important change is that network
elements for the IP multimedia services are exclusively based on IPv6. The future use of IPv6
has some advantage like more addressing space and better equipped to handle mobile IP
UMTS will offer high speed access rates, which depend on radio conditions as well as the
network environment (pico/ micro-cells), by using expanded bands of wireless spectrum at 2
GHz. This requires a new air interface meaning investments in completely new basestations,
which is a lot costlier than the upgrades to GPRS and EDGE.
The higher transmission rates of UMTS are meant to enable access to voice, graphic,
multimedia, and video-based information and communication services, regardless of the kind
of underlying network. It is also intended to enable customers to choose the desired quality of
services by offering differentiation in tariffs. UMTS will support the following bit rates: up to
144 kbps in macro-cellular environments (e.g. in moving vehicle or train), up to 384 kbps in
14 G I G A P O R T
micor-cellular environments (e.g. walking pedestrian) and up to 2 Mbps in indoor/ pico-cellular
environments (e.g. in office buildings).
3.2.2 From e-business to m-business models
The migration towards increased bandwidth and reliance on internet protocols mean that
wireless internet is slowly becoming a reality. This could mean that internet business models,
or e-business models, become feasible in the wireless environment too. The main reason why
business models have become the object of wide interest is precisely because of a number of
highly visible companies which, over the past few years, have developed business over the
Internet. Holland a.o. (2001) provide the following examples of e-business models:
· Advertising model: in this case a website provides room for advertising messages in the
form of banner ads, pop-ups etc. Advertisers pay for exposure (‘eye-balls’). Portals are
the most important exponents of the advertising model.
· Brokerage model: brokers are ‘market-makers’. They offer a platform where supply and
demand can meet. This kind of transactions facilitation is relatively easy to do in an
electronic environment because of the low marginal costs involved.
· Infomediary model: in this case value is created by collecting, processing and exploiting
information about consumers and users. The activities of infomediaries are often related
to the idea of ‘mass customisation’.
· ASP model: application service providers host and provide access to applications over a
network. The ASP model is based on the (thin) client / server – model. Value is created by
giving users the possibility to outsource a number of activities and services.
· Subscription model: this model is based on charging subscription fees for access to
infrastructure, to services or to content.
· Floatmodel: this is based on exploiting the time gap between payment by the customers
and payment to the suppliers. This is basically a matter of logistics, facilitated by the use
of digital networks.
· ISP’s: internet service providers provide access to the Internet along with some
supporting services such as hosting.
· Licensing model: this is based on the patenting of new ideas or technologies. What’s new
to the electronic environment is the patenting of new ways of interacting with the customer
and of the resulting new business models.
· E-tail model: this model consists of wholesale and retail via the Internet, either by
‘completely’ virtual enterprises or by ‘brick-and-mortar’ companies expanding their outlets.
· Utility models: this is based on a pay-per-use or a pay-per-view model. Customers are
charged per time unit or per bit used.
As Hawkins (2001) observes, most of such on-line business models emulate off-line models.
In these cases, the novelty of e-commerce or e-business is simply that commerce or business
is taking place in a new, electronic environment.
However, some qualitative changes caused by the advent of the Internet can be observed.
For instance, there is evidence that this environment favours more complex business models
and more freedom of choice from existing business models. If there are indeed entirely new
business models to be found on the internet, these usually refer to new forms of dis- and
This already provides a clue as to which business models might be developed in a wireless
Internet environment. However, the mobile environment creates specific problems and
opportunities for creating value. The next paragraph explores some of the typical
characteristics of 2G and 2,5G services that are influencing mobile business models.
3.2.3 Service characteristics
So what are the characteristics of current and emerging services in the Dutch market? Most
observers will agree that the main 2G services are voice communications, short messaging
service (SMS), and WAP services. Among these, one-to-one communications (i.e. voice and
messaging) are by far the most popular. WAP information services attract far less users.
Reasons commonly cited for this are the long connection times, limitations imposed on
content and interactivity by screen size and data rates, a lack of attractive content, and a
failed management of expectations.
2,5G (GPRS) technology has brought the promise of new services to the Dutch market.
GPRS can be seen as a stepping stone in the wireless migration path towards more
bandwidth and more reliance on internet-based transport. Additional services which are
theoretically possible with GPRS, are a.o. mobile office services, mobile commerce services,
enhanced mobile information, communication and entertainment services. In 2001, three out
of the five Dutch mobile operators, i.e. Libertel-Vodaphone, Telfort/O2 and KPN Mobile,
completed the upgrading of their networks to 2,5G and began to develop GPRS services.
Currently, all three of these operators have started by offering one type of GPRS service:
mobile office services. The most important traits of these services are the fact that users are
constantly on-line, have access to the company intranet and other applications, and have
access to the Internet. Libertel-Vodaphone has introduced Libertel Corporate GPRS Access,
a business service allowing the customer to have mobile access to corporate networks and
systems on their mobile phone, laptop or PDA. Telfort/O2 has followed this with the
implementation of the same kind of service named Telfort Mobile Office, while KPN Mobile
also has a service called Mobile Office Online. The three operators all have their own third
parties with whom they co-operate and develop new applications and services.
16 G I G A P O R T
The extent to which these services will be successful and to which other GPRS services will
be introduced to the market, will in the first place be determined by two basic characteristics:
transmission speed and transmission costs.
Theoretically, GPRS can deliver a maximum speed of 171,2 Kbit/sec. Transmission rates that
are mentioned in literature vary from 115 Kbit/sec to 170 Kbit/sec. However, in practice,
maximum data speeds are more likely to approach 56 Kbit/sec, because at this stage of
developments there are still a lot of unsolved problems in the network, the handsets and the
software, all of which cause restrictions to the transmission rate.
For instance, the GPRS phones launched by Nokia in March 2001 have a maximum
transmission rate of 40 Kbit/sec. According to Nokia, as GPRS networks are upgraded and
expanded, new handset models will be able to support around a transfer rate of around 60
Kbit/sec. Motorola, the world's number two mobile phone maker, offers 30 Kbit/sec rates for
data transmission at this moment, while Ericsson phones can manage 43 Kbit/sec (Reuters,
2001). These rates are effectively much slower than those promised by telecom operators.
The effective transmission rates will also be restricted because of the limited capacity, which
is measured in time slots, that is available. GPRS can use several timeslots to send packages
of data very quickly one behind the other. However, in practice, the operators have only
reserved one time slot for sending data. This means that as the number of users in one cell
grows, transmission rates will drop very fast.
Table 3-1 Transmission speeds
In theory (Kbit/s) In practice Top rate In practiceNormal
(Kbit/s) rate (Kbit/s)
GSM ? 14,4 9,6-10
GPRS 170 40-50 25-30
EDGE 384 ? Approx. 56
UMTS 2000 384 ?
As for the impact on services, this means that GPRS is not suited for multimedia services or
streaming services, but rather for asynchronous communication and data transmission. The
fact that only one out of eight time slots in a GPRS cell is reserved for data traffic, indicates
that voice is expected to remain the most important service.
Another important issue is the cost of making use of GPRS. The expectation is that the Dutch
mobile operators will charge a subscription fee of around 30 per month. In exchange, the
customer is getting an 'always-on' access to the GPRS network plus a ‘free’ amount of
What does this mean for the services people will use on their GPRS phones? As a reference,
a typical email without attachment is somewhere between 1-10 KB. This means that 1 MB of
data includes on the average about 200 emails without attachments. A WAP-page is between
0,5 and 1,5 KB. So 1 MB of data is good for 1000 WAP pages. An internet-page is on the
average about 80 KB, which means that for 1 MB one can only view 12 pages. The table
below provides an overview of tariffs as they are known at this point in time for Telfort/O2,
which has released the most comprehensive list of tariffs as yet.
Table 3-2 Costs of GPRS: Telfort/O2
Amount Price in euro Average Average Average
price per e- price per price per
mail web page WAP page
1 MB 30 per month + 0,15 2,5 0,03
2,50 per extra MB
20 MB 75 +2 per extra 0,02 0,31 0,004
40 MB 115 + 1,50 per 0,015 0,24 0,003
Sources: TNO-STB; Houtman (2001)
Telfort/O2 is planning to introduce three subscriptions: including 1 MB, 20 MB, and 40 MB.
This would mean that with a 1 MB subscription, the downloading of 1 MB of web pages will
cost 2,5 per web page visited. The downloading of 2 MB of web pages results in a cost of
1,35 per web page, and the downloading of 5 MB results in a cost of 0,66 per page. So,
when using 5 MB of data per month, the costs per page are sharply reduced, but it still costs
about 1,5 Dutch guilders to view one web page. This also means that it will be very costly to
send movies and audio documents by mobile phone. With a 20 MB subscription, one web
page costs 0,31 or less. With a 40 MB subscription, a web page costs 0,24 or less.
All of this means that a monthly fee of at least 40-45 is necessary to arrive at an acceptable
price for downloading a web page; while the use of e-mail or WAP pages for that price
becomes almost unlimited.
Telfort/O2 also plans to introduce the BlackBerry, a messaging and agenda device, to the
Dutch corporate market. Its server software costs at least 3000 . The device will cost approx.
18 G I G A P O R T
700 a piece. Subscription costs will be 62,5 a month including a 5 MB data limit. The main
feature is its permanently on-line status, keeping e-mail and agenda status constantly up-to-
date. For the consumer market, Telfort/O2 has more distant plans to launch the xda, a
combination of palmtop and mobile phone, which uses MS PocketPC 2002, Microsofts new
operating system for mobile devices.
Adding to this the limited availability and high cost of GPRS phones, which is somewhere
around 500 at this moment, all of this points to corporate users as the initial target user
group. It is still an open question to operators whether private consumers will want to visit web
pages and send e-mail enough in order to justify getting a GPRS subscription.
So, while GPRS renders possible a whole range of rich voice and data services, and the
associated range of business models, today’s GPRS implementations mainly point towards
already existing communication services as the wireless services of the short term future,
complemented with some specific services targeted at the corporate world.
3.3 Wireless value networks in the Netherlands
The previous paragraph looked at some characteristics of GPRS services as an indication of
which m-business models may be expected in the short term future. This paragraph examines
the value networks formed by actors in the Dutch market in order to develop these wireless
services in the Netherlands.
In 2001, Libertel-Vodaphone, Telfort/O2 and KPN Mobile began to develop GPRS services for
the business market. Yet, by the end of the year, the operators are still running pilots in order
to test the GPRS network, the software and the currently available mobile phones. Although
problems in all of these fields still seem to be abundant, the main reason behind the delay
seems to be the lack of business models supporting GPRS services. Operators are starting to
admit that, in the race towards mobile data services, strategic and emotional considerations
have guided investments rather than business cases, which were (and are still) considered as
too uncertain (see e.g. Buitelaar, 2001).
Also, there is great uncertainty over which collaborative networks have to be formed in order
to put wireless services on the market. This is caused by the crisis facing network operators
as well as the failure of an array of on-line content models. The next paragraph takes a look at
which networks currently exist in the Netherlands, in connection with the introduction of new
(GPRS) services to the market.
3.3.1 Actors and activities in the Dutch market
Table 2.5 provides an overview of KPN Mobile’s main strategic partners for GPRS services in
the Dutch market. In 2000, KPN Mobile and NTT DoCoMo closed a strategic co-operation
agreement that was topped off by a 15% participation of NTT DoCoMo in KPN Mobile. KPN
Mobile and NTT DoCoMo have also announced plans to start up a new company aimed solely
at mobile data, in particular I-mode services, which were introduced successfully by NTT in
Japan. KPN Mobile has vowed to invest 90 million in the new company, and to incorporate
its mobile portals and platforms M-info and E-plus online in it. NTT DoCoMo will invest 50
million , thereby taking a 25% stake, and will make its knowledge on mobile data available.
As the following overview shows, the main actors in KPN Mobile’s network are either linked to
its strategic partner NTT Docomo, or consist of wholly owned subsidiaries acting as service
providers to KPN Mobile. In addition, there are some links with equipment and handset
manufacturers, which are actively participating in content provision and piloting.
Table 3-3 Overview of Actors and Activities for KPN Mobile GPRS services (* Not specific for
Main actor Secondary actor Activities
KPN (85%) NTT DoCoMo (15%) KPN Mobile is developing new mobile services
for GPRS together with its Japanese partner,
who has made I-mode, a system including
several interactive mobile services, into a big
success in Japan.
KPN Mobile RAM Mobile Data 100% subsidiary of KPN Mobile. Exploits the
Mobitex datanetwork. Is now working together
with KPN Mobile to develop GPRS-services for
vertical markets. RAM is turning into a service
provider for hosting and WASP services.
KPN Mobile TIM Joint venture to develop an Internet portal
based on i-mode*
KPN Mobile Interpay, Nokia Pilot WAP payments*
KPN Mobile Toshiba Producer of the Snapcam which is further
developed by KPN Mobile and NTT DoCoMo*
KPN Mobile Ericsson, Nokia Suppliers of the GPRS network
KPN Mobile IBM, Interpolis Pilot clients/partners GPRS service Mobile
KPN Mobile M-info, XS4All GPRS portals/ WISPs
20 G I G A P O R T
As for Libertel-Vodaphone, based on the publicly accessible data shown in table 3-4, it can be
said that this company mainly has built relationships with a large array of pilot partners
including equipment manufacturers, applications developers, and the research and
Table 3-4 Overview of actors and activities for the development of Libertel-Vodaphone GPRS
services (* Not specific for GPRS)
Main actor Secondary actor Activities
Libertel-Vodaphone Ericsson Supplier of the GPRS network. Ericsson also
supplies the Ericsson Virtual Office, a set of
applications in order to improve the speed,
security and accessibility of the Libertel
Corporate GPRS Access services.
Libertel-Vodaphone Cisco system Pilot client Libertel Corporate GPRS Access
Libertel-Vodaphone Ernst & Young Mobile workspace pilot development
Libertel-Vodaphone PinkRoccade Pilot client Libertel Corporate GPRS Access
Libertel-Vodaphone KPMG Pilot client Libertel Corporate GPRS Access
Libertel-Vodaphone GigaPort, TU/e, Pilot GPRS user possibilities
Libertel-Vodaphone Libertel-Vodaphone, Joint venture Syntrack to develop a test
Ericsson, Industriebank environment for new network technologies*
Telfort/O2 closely cooperates with its mother company British Telecom. BT Cellnet, its UK
counterpart, launched its first set of GPRS services in june 2000. By the end of 2001, Telfort
will undergo a name change to O2, as will all mobile daughters of BT Wireless.
Table 3-5 Overview of actors and activities for the development of Telfort/O2 GPRS services
(* Not specific for GPRS)
Main actor Secondary actor Activities
Telfort/O2 Ericsson Supplier of the GPRS network and pilot client
Telfort/O2 Ernst & Young Interim Implementation of Multi Access Portal. Ernst &
Management, Netlink Young is pilot client and will market the system in
Framfab & Oracle a later stage, Netlink Framfab is system integrator,
Oracle is the software supplier.
Telfort/O2 RIM Introduction BlackBerry (messaging hardware and
software) for GPRS network
Telfort/O2 Compaq, Microsoft Co-organisers of a forum for applications for
vertical markets, based on Windows CE *
Telfort/O2 Siemens Pilot client for Telfort/O2 Mobile Office
Judging from these data, Telfort/O2 has mainly established partnerships with applications
developers and equipment and handset developers.
3.3.2 Interactions and hierarchies
Regarding the interactions and relationships between the actors described in the paragraph
above, it has been stated that the network operators remain pivotal actors in the value
networks, although the linkages and interdependencies increase. All three operators have
sought to create partnerships with pilot partners, who often act both as launching customers
and co-developers. These pilot partners are usually systems solutions and applications
providers, participating in the setting up of GPRS service pilots. There are few initiatives in the
content provisioning sphere, and rather more in the applications, equipment and handset
providers, and business consultancy sphere. While Libertel-Vodaphone and Telfort/O2 may
rely on their international parent companies for working out a number of general solutions,
KPN Mobile has looked for a strategic partnership with NTT DoCoMo for this. Also, KPN
Mobile, in connection with its own subsidiaries, is developing a number of solutions itself.
Regarding hierarchies and power relationships, this means that:
Network operators such as KPN Mobile, Vodaphone or Telfort/O2 have traditionally integrated
the whole network operating value chain. They are still in a strong position because of their
access to the customer (in terms of billing relationships, but also in terms of trust). In general,
though, they are retreating to their core activities because of their huge investments in the
recent past and limited outlook on short or middle term profitability.
· Network equipment vendors traditionally provide a relatively standardised product.
However, this is changing as new applications and middleware are being developed by
these companies. As these vendors are now often the same companies as the ones
providing platforms and device solutions, their position in the value network has become
22 G I G A P O R T
of much greater importance. This has also happened because of increasing financial
dependencies of operators on equipment vendors through all kinds of equipment
· Wireless application service providers (WASPs) may develop and host applications for
end-users, but they may also concentrate on providing solutions for mobile network
operators. This means that there are strong links with middleware/platform providers.
· Handset vendors are a well established part of the mobile value system. As they provide
hardware as well as software solutions, they not only have access to the user because of
the direct buying relationship, but they can also preset the operating and browser systems
running on the handsets to their own advantage.
· Payment processing is no longer the exclusive domain of operators. With the possible
advent of mobile commerce, requiring a number of mobile financial services, other
parties, such as banks, specialised billing companies, and mobile commerce platform
vendors, have opportunities to get involved in this activity.
· Middleware/Platform Provisioning is becoming an ever more important part of the wireless
value system. Examples are WAP gateways, SMS gateways, mobile portal platforms,
mobile commerce platforms, and other applications platforms.
The implications of these developments are reflected in the business models behind wireless
services, which are reconstructed in the next paragraph.
3.4 Current and emerging wireless business models
As was mentioned earlier, four main types of services with their accompanying business
models can be observed in the Dutch mobile market today. Among these are three existing
services: voice communication, messaging, and WAP services. However, the business
models behind these services are likely to change, taking into consideration the
characteristics of GPRS as outlined previously. The fourth type of services has been
introduced by the network operators that have implemented GPRS in their networks, i.e.
mobile office services.
Figure 3-2 reconstructs the typical business model behind voice services. This is a very
simple model, with the mobile operator as the central actor. However, with the subdivision of
telecom groups into fixed and wireless operators, and the advent of so-called mobile virtual
network operators (MVNOs), some fragmentation of this model can be expected. In the case
of MVNOs, these companies take over the billing relationship with the customer.
p, x = subscription fee
Consumer Business v, y = conversation cost
o = cost of capacity
w = equipment cost
z = equipment subsidy
Mobile Operator Vendor
Figure 3-2 Voice service business model
Figure 3-3 represents a simplified model of (short) messaging services. Traditionally, these
are one-to-one services. However, the huge popularity of these services has lead to the
development of all kinds of content services delivered by SMS. In this figure, this is
represented by the SMS content provider. Apart from the mobile operators, it is the platform
providers, which are providing the SMS servers, that are the most important actors in this
business model. As mentioned before, these platform providers are often the same parties as
the equipment vendors.
24 G I G A P O R T
o = interconnection tariff
Consumer Business p = cost of infrastructure
w = cost of SMS-server
x = subscription fee
Market y = cost of SMS-message
z = equipment subsidy
Mobile Service w
% of y
SMS-service Network Service
Figure 3-3 SMS service business model
Figure 3-4 reconstructs a WAP service business model. This is a more complex business
model, which is a.o. due to the many different forms of paying for content. There is no fixed
content model yet. The actual form and direction of the revenue streams for content
provisioning depend upon the premium value of the content and on the strength of the
gatekeeper’s role of the network provider vis-à-vis the role of the content aggregator. Also,
there are different forms of service provisioning. These affect the relationship between the
platform provider, the network operator, the mobile service provider, and the content
Alternatively to the model presented here, the mobile service provider may be, instead of
being integrated with the mobile network operator, bundled with the role of content
aggregator. In this case, an integrated WAP service provider exists, which serves both as
portal as well as wireless Internet service provider (WISPs).
In this model, the customer only has a billing relationship with the operator. Alternatively,
though far less common, the customer may also have a billing relationship with the content
provider or content aggregator.
Under GPRS, the cost of time on-line (factor y) will be replaced by the cost of data transport.
This is also true for the model represented in figure 3-5.
h = hosting cost
k = cost of content
Contentprovider m = income generated
n = % of income
Contentprovider Consumer Business o = cost of being
Market Market selected for portal
o p = infrastructure cost
w = cost of WAP-
o n Market gateway
k x = subscription fee
% of m
y = cost of time on-line
Contentaggregator Mobile Service z = equipment subsidy
% of m
contentprovider w Platformprovider
h Mobile Network
Contentaggregator/ equipment vendor
Figure 3-4 WAP service business model with integrated mobile operator
Finally, figure 3-5 represents a simplified and still more or less hypothetical mobile office
business model. In this model, the customer not only pays the network operator, but he or she
also pays an independent platform provider for the use of the required applications and
gateway. This platform provider may serve as a WASP, either supporting the end-user, or
delivering to the network operator.
p = infrastructure cost
w = cost gateway and
x = subscription fee
y = cost of time on-line
x+y z = equipment subsidy
Mobile Network vendor
26 G I G A P O R T
Figure 3-5 Mobile office service business model
From these wireless business models, which were derived from the situation in the Dutch
market today, it can be concluded that, in general,
· platform/middleware providers have gained a relatively strong position in the value
network, even more so as they are often linked with handset and network vendors. It can
be said that the ‘enablers’ are moving into the core of the wireless business model.
· the billing relationship with the customer, however, is still largely held by the mobile
operator, although it is no longer restricted to them.
· there is no definite content model yet.
4 Towards business models for UMTS services
This chapter briefly introduces a number of characteristics of UMTS which might alter or
reinforce the present wireless business models. It looks at a set of scenarios and forecasts for
UMTS services and draws some conclusions about their implications for next-generation
4.1 UMTS characteristics
As was mentioned before, UMTS represents a next step in the wireless migration path. Table
4-1 provides an overview of the main differences between UMTS and GPRS. These can be
traced back to the service environment, the network design, and cost structure of UMTS.
The UMTS service environment can be characterised as an always-on data environment. This
means that data services and enhanced voice services become dominant. In this
environment, voice becomes an application. Mobility of services in this environment is
enhanced, for instance, by the different way of naming in UMTS. While GSM and GPRS
together have four different names (numeric strings), each assigned to a specific service,
UMTS users can use many Ids to access different services in different virtual environments.
Under the latest version of UMTS, the network migrates from a circuit switched network with
an additional packet core network to a multiservice IP-based network. This will be based on IP
version 6, allowing more security, increased mobility, a reduction in costs because of
increased efficiency, and different pricing options. By adopting Wideband-CDMA as its
operational mode, UMTS networks will offer more capacity and quality. Also, the cells in a
UMTS network are smaller than in a GPRS network, which means higher deployment costs
but also more possibilities for location based services.
Table 4-1 Characteristics UMTS versus GPRS
GPRS UMTS Release 5 (December 2001)
Close to voice-centric environment Always-on data environment
Voice services Data services; rich voice services.
Rich Voice is the enhancement of voice services to
include advance voice capabilities such as Voice
over IP and multimedia elements.
28 G I G A P O R T
Circuit switched network. Multiservice IP based network.
GPRS will provide an additional packet core UMTS (Release 99) will introduce the new UMTS
network to the circuit switched phase 2 GSM. radio interface known as UTRAN (UMTS Terrestrial
The function of GPRS is to provide IP access Radio Access Network). The basic structure of the
via pipes (tunnels) from the mobile terminal to core networks will not change much from that of
an ISP or corporate network at the edge of the GSM with its overlay of GPRS. The core network will
mobile networks. The ISPs or corporate have IP based transport for the IP part and circuit
networks may be attached to either the visited switched transport for the circuit switched part.
or home network. GPRS will use the existing UMTS also provides a 64kbit/s circuit feature which
radio interface structure so that mobile can be used to carry IP traffic.
terminals with GPRS are compatible with GSM. UMTS Release 5 (formerly known as Release 2000 -
Voice services are still circuit switched via the All IP network) will migrate the core network to a
existing GSM network. single IP network and add multimedia services
based on IP. Release 5 networks shall use the
Packet Switched (PS) domain and the IP Multimedia
(IM) domain to provide IP multimedia service
support, such as voice, video etc.
Consequences for services
Cost for the services can be divided between Cost depends on the kind of IP service offered, e.g.
non voice (amount of data, flat rate) and voice real time or not.
services (time, location based).
Choice of IP version
IPv4 (32-bit address size). In the absence of any other reason to start earlier,
UMTS operators will have to start to introduce IPv6
(128-bit address size) in the IP Multimedia domain
when they start to implement services based on
Release 5 of the UMTS.
Consequences for services
Renumbering is a serious issue in IPv4 e.g. a Some of the advantages of IPv6 which are relevant
site has to give back its address space to the to the mobile environment are:
ISP when it changes to another ISP. This is · Ipv6 supports mobility much better than Ipv4
handled by Network Address Translators · Ipv6 reduces administrative and management
(NATs). One of the biggest problems is that overhead (and costs) by autoconfiguration
NATs affect the transparency of the end-to-end (Plug&Play).
connectivity, a fundamental assumption in the · Ipv6 will provide means for privacy and security
Internet design. Loss of transparency: as an integral part of the standard rather than as
· Disables a whole set services like IP a separate protocol.
security. · Ipv6 has an enlarged address space enabling all
· Introduces a single point of failure, and terminals to have a globally unique IP address
makes the network less robust because in for the duration that they are connected to the
a failure situation the state values stored in network. This will enable services and
the NAT will be lost making recovery in applications to be developed without having to
most cases impossible. take into consideration network issues like NAT
Creates problems when two companies with (Network Address Translator) etc.
“uncoordinated” private addresses merge.
GSM users have three different E.164 names Names are related to services and each service
(numeric strings) for voice, fax, and data must specify the form of name to be used. Third
services on GSM. GPRS will add names of the generation technology is designed to support
form “user@domain”. multiple services and hence more than one type of
Consequences for services
Voice services are telephone-based using a Voice service will be IP based so a numeric string is
numeric string. Other services can be accessed not necessary or used. Users can use many Ids in
similar to WAP or Internet. The provision of different virtual environments accessing different
information can limit portability. services.
Support of mobility
Mobility is supported by providing a virtual Mobility for IP multimedia may be different because
connection between the terminal and a it will be based on IPv6. There is a mobility
Gateway GPRS Support Node (GGSN) in enhancement of IPv6 which can create an
either the visited or home network. This virtual association of:
connection is provided in two segments: · A static IPv6 address for the mobile terminal
· Between the mobile and the visited assigned by the home network
Serving GPRS Support Node (SGSN) by · A dynamic “care of” IP address assigned by the
the procedures used for the air interface foreign agent (visited SGSN)
· Between the visited SGSN and the GGSN Both addresses are used in communications and
by the GPRS Tunnelling Protocol (GTP) this association allows packets to be routed to and
This virtual connection is maintained as long as from the mobile without having to pass through the
the mobile remains “on” and the mobile end of home network, providing more efficient routing. At
the GTP can be moved if the mobile moves the same time the use of the static IPv6 address
from the coverage area of one SGSN to enables the other features of IPv6 such as security
another. to be used, since they depend on the availability of a
Under GPRS and UMTS Releases 3 & 4, the static address.
user may select an ISP or Intranet using the It is not yet clear to what extent this feature of Mobile
Access Point Name. However, the mobile is Ipv6 will be used in Release 5.
assigned the IP address used for external
communications by the GGSN and not by the
ISP or Intranet.
Consequences for services
The user has a choice of GGSN (expressed Although there are many uncertainties about Mobility
through the Access Point Name) and can either for IP multimedia, it should make open access from
log-on to the visited or home GGSN. This mobile terminals to any ISP or Intranet possible.
choice may be influenced by the roaming IPv6 provides enhanced mobility in which the mobile
agreements between the operators concerned terminal can be assigned by the home network
and the home operator can prevent the mobile (static IPv6 address) and by the foreign agent
from logging on to the GGSN of another (dynamic “care of” IP address). This makes it more
network. This can limit the accessibility of some flexible for the use of services without having to pass
services offered. through the home network, providing more efficient
routing and services.
Location and cells
Number of cells 5,000 rising to 7,500 per Number of cells 17,500 cells per operator. Because
operator. Cell range (GSM 900 <300m-35 km of the smaller cell sizes of the UMTS network (and
and GSM 1800 <100m – 15 km). integration with GPS), more accurate location
determination is possible.
Consequences for services
Relatively low installation costs. Limited Higher installation costs and more hand-over when
number of location based services. moving around. Location based services.
Consequences for services
No satellite services High capacity download possible in remote area’s.
Time Division Multiple Access (TDMA) is used Two operational modes, Frequency Division Duplex
in the GSM standard. GPRS uses a maximum (FDD) and Time Division Duplex (TDD), in parallel
of eight time-slots for a single user. However, provide the end-user with the benefits of both radio
initial GPRS equipment will not support the use access principles in either overlapping or distinct
of that much time-slots, otherwise this would environments. Both will use Wideband Code Division
decrease speech capacity, as GSM and GPRS Multiple Access (W-CDMA). Some of the
share the same timeslots. advantages of using CDMA are that there is no need
for transmission synchronisation, or spread
spectrum transmission, which offers useful
protection against interference, multiple paths, other
systems and enables satellite communication with
Consequences for services
In theory, GPRS will enable service like web In theory, UMTS will enable video and audio, either
Web Browsing, Document Sharing/ real-time, near real-time or download. Examples are
Collaborative Working, Audio, Home two-way video conferencing with audio, video
Automation, Remote LAN Access, Electronic streaming, hi-fi music streaming, Voice over IP
Agents, Dynamic Authoring, Job Dispatch, Still (VoI,), Moving Images, File Transfer, Downloading
Images and Information Services- Qualitative. Software, Virtual Home Environment and Interactive
Multimedia IP services that are video based will Games. The speed and quality of the service will
not be possible with GPRS because of its enable new presentation formats, such as ultra high
limited bandwidth (amongst others caused by voice clarity and mobile multimedia applications.
the sharing of timeslots and less efficient use of
the frequency band).
30 G I G A P O R T
Sources: http://www.umts-forum.org/; Gudding, 1999 and 2000; K. Hoogervorst, 2001, EHPT,
2000, K. Jedeloo, 2001; Ponsioen & Van Staalduinen, 2001
As for the costs of UMTS services, these are still very unclear. It seems certain that
transmission will become less costly as efficiency increases. However, this doesn’t mean that,
for instance, streaming video will become feasible over UMTS. On the contrary, some
research indicates that the efficiency gains associated with UMTS might sooner be used to
diminish the costs of (voice) communications than to develop all sorts of new enriched
services. As GSM networks are becoming increasingly clogged up, the additional UMTS
spectrum may serve as a way out.
However, there is the question of how to raise enough average return per user (ARPU) to
justify the high cost for operators of deploying UMTS. According to recent calculations, even
with an ARPU of between 40 and 55 per month and with high penetration rates, it will still
take operators between 10 and 15 years to reach payoff time (Bohlin & Björkdahl, 2001).
Some researchers are speculating about flat fee or very low communication prices under
UMTS causing a quantum leap in (mainly voice) communications (Odlyzko, 2001). In any
case, this dilemma will require extensive experimentation with different pricing and business
models in order to be overcome.
4.2 UMTS service scenarios
What, finally, does UMTS mean for future services and their underlying business models? In
addition to the general observations made above, a number of scenarios is feasible (see also
Ballon a.o., 2000). This paragraph describes four different scenarios concerning future UMTS
services. They are differentiated by using the following uncertainties surrounding UMTS
· What kind of Quality of Service (QoS) will be offered to end-users? Will QoS be best-effort
(the “internet model”) or managed (the “telecom model”)?
· Will there be any integration of functions into one handset? Will consumers use a single
handset (an “all singing and dancing machine”) or will they have a multitude of
interconnected devices (“pervasive connectivity”)?
On the basis of these uncertainties, four different user contexts, corresponding with four types
of services and business models, have been constructed. The four service scenarios are
depicted in figure 4-1.
Cellular Mobile acces
W ebbrowser device
Office on the Cellular
move W allet
Figure 4-1. UMTS service scenarios
This paragraph describes these service scenarios and assesses their implications for next-
generation business models.
The Cellular Webbrowser
In this scenario, the mobile handset remains more or less the same as today, i.e. it doesn’t
communicate with other types of devices, but it is enhanced with some standard mobile
internet functionalities. It is used for personal communication and information searches on the
internet. There is a huge increase in the quantity of information (and transport), rather than in
quality. There is a big heterogeneity in handsets, which vary from very cheap internet enabled
terminals to integrated walkmans, cellular phones and gameboys. In general, the content and
the intelligence are located in the network with the providers and the network operator. The
main types of services are : voice communications, e-mail, WAP/internet browsing, directory
services, advertisements, personal instant messaging.
Impact on business models:
Mobile internet is a mass market. There are few added value services. The end user pays for
communication and/or access. Content provider generally don’t get paid to display their
content. There is hardly any direct m-commerce. Few paid added value services are
successful. There are some portals for directory-type services, mainly deriving revenues from
content providers. Operator revenues stem from voice and e-mail traffic and from flat rate
subscription fees. Mobile payment services do not develop, a.o. because of security hazards
and low accuracy of location determination.
The operator integrates the roles of service manager and transport provider. The first priority
for the operator is the fast roll out of a mobile broadband network, rather than the provision of
services. There are a lot of content providers and packagers, but only few of them make
32 G I G A P O R T
The Office on the Move
There are a lot of functionalities and intelligence integrated into one handset. The mobile
phone is a PDA, laptop and cellular phone all in one. A lot of data is stored in the handset
itself. The managed Quality of Service makes it possible to have services tailored to the
needs of specific (mainly business) users. There is room for personalised, added value
services such as unified messaging, productivity services and personalised services. The
main types of services are: especially business and productivity services, some local m-
Impact on business models:
Vulnerability of data is an acute problem, for which specific security services are offered by
operators and/or service managers. The end user pays the operator and also pays a service
provider offering a service platform and a number of added value services. There are different
quality of service (and price) categories. There are good opportunities for rather closed and
managed platforms delivering specifically tailored services. These are offered by players
closely connected with the network operators. Maintenance and upgrading of the office-on-
the-move happens with software that is downloadable from the WASP or WISP that the user
(or his operator) has a contract with. There are good opportunities for WASPs or WISPs,
possibly delivering their services as a white brand to the operator.
The Mobile Access Device
The handset is primarily a tool for connecting to the internet. It sends the information it
receives to other terminals such as laptops, car computers and PDAs using Bluetooth. There
is little intelligence residing in the handset, which can be further miniaturised and integrated in
e.g. a wrist watch. Users have a large number of devices, each with very different product life
cycles and functionalities. Communication and connectivity services are most used. The
biggest problems lie in the field of interoperability. The handset is context aware rather than
personalised. The user can however indicate a number of preferences. There are few
location-based services. The main types of services are: communication services, alert
services, push services, downloading of applications and content.
Impact on business models:
The end user is paying the telecom operator for transport and access, and he is paying some
content providers on the net for a number of services. There are few players involved in the
packaging of content, which may be mainly distributed on a peer-to-peer basis. Handset
vendors and application developers have good opportunities.
The Cellular Wallet
The handset is the central hub in a standardised set of devices. There is a lot of intelligence
residing in the terminal, but it is not used to store a lot of information. This is an advantage for
mobile payments and the storage of key personal data. The handset functions as an
electronic passport, a credit card and a purse. It communicates with other devices on the
basis of a general standard. The user is constantly on-line. In general, content is transferred
to other devices. Added value is a.o. to be found in the fields of security and payment.
Robustness and security are important issues. Personalisation is very high. Location-
dependence is quite big because of the payment and identification functions. The main types
of services are: m-commerce, identification and access services, travel services, connectivity.
Impact on business models:
The user pays a fixed subscription fee and, possibly, additional fees for services delivered to
him by the operator/service provider/bank of his choice. In this scenario, there are good
opportunities for application/service providers, that function as middlemen and are able to
send an integrated bill. They can enter into partnerships with specific operators or operate
independently over an open service platform.
This paper set out to find a useful approach to constructing a framework for the analysis of
business models, to provide an overview of present wireless business models, and to give
some indications of what next-generation mobile business models might look like.
In doing this, it stressed the continuity in value networks and business models from 2G over
2,5G into 3G, which is partly reflected by the ever prominent place of communication services.
However, a number of potentially far-reaching developments were signalled, such as the
increasingly strong role of application and platform providers in wireless value networks.
Also, the role of operators is undergoing change. If one thing at this point is clear, this is that
extensive experimentation with different business models for 3G services will be necessary
for these operators to survive.
34 G I G A P O R T
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