This is an overview of my MBA dissertation written in 2009 on the evaluation of mobile internet business models from mobile operators point of view.

1. Evaluation of Mobile Operators’
Mobile Internet Related
Business Opportunities
MBA Dissertation at the Durham Business School
2009
Author: Ottó Werschitz
Note: this presentation includes only the most important details and findings of
the otherwise in-depth study.

2. This work is licensed under the Creative
Commons Attribution-NonCommercial-NoDerivs
3.0 Unported License. To view a copy of this
license, visit
http://creativecommons.org/licenses/by-nc-
nd/3.0/.
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3. Why This Study?
In developed economies, the market for traditional (voice-based)
mobile telecommunications services is saturated - > new growth
opportunities lie mainly in internet and fast mobile data services
In order to address mobile internet related business
opportunities, operators need to develop new business models.
It is essential to explore
• these business models
• other market players involved in this business models
• how these business models help operators exploit mobile
internet related opportunities
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4. The Research Question
Do the business models chosen and
implemented by mobile operators enable them
to position themselves successfully in their
relevant market (as expanded by mobile
internet opportunities) or will the majority of
the value created by mobile internet be
exploited by other players?
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5. Dissertation Structure
1. Literature Review (highlights)
2. Research Design
3. Case Studies
4. Discussion of Results
5. Conclusions
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6. Highlights of Literature Review
 Telecommunications have become a deconstructed industry with
services provided by several inter-operating independent companies (Li
and Whalley, 2002)
 Delivery of value to end-users evolved from integrated value chain to
value networks of independent and inter-working players (Li and
Whalley, 2002)
 Business model innovation is needed for mature industries [such as
telecommunications] to avoid decline and / or to exploit technological
advancement and / or to maintain competitive edge (Chesbrough and
Rosenbloom, 2002; Dowdy and Nikolchev, 1986 )
 Business Models: conflicting definitions. For this dissertation, the
following was selected:
 Osterwalder (2004) for a structured view of business model
 Gordijn and Akkermans (2001) for modelling of value networks
 Ballon et al (2008) for internet-enabled mobile operator specific
business models on the basis of the value network concept
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7. Research Design: Case Study Approach
Three value network based mobile operator related business models are
defined for mobile internet related business opportunities (Ballon et al, 2008)
 Operator-centric: the mobile operator acts alone as Network Operator, Service
Aggregator, Platform Operator and Portal Provider and contracts Service
Providers.
 Device-centric: 3rd-party device vendor (such as Apple) acts as Service
Aggregator, Platform Operator and Portal Provider and contracts Service
Providers. The mobile operator’s role is limited to providing mobile internet
access and (not necessarily) selling the device bundled with subscription.
 Aggregator-centric: an independent 3rd-party (such as Facebook or Google)
takes the Service Aggregator, Platform Operator and Portal Provider Role. The
mobile operator only provides mobile internet connectivity.
A case study for each value network was prepared on the basis of desktop research
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8. Research Design: Case Study Contents
1. Selecting global operators and 3rd parties for
analysing the given value network
2. Understanding the type of business strategy
intended by the operator in the value network
3. Determining the mobile operator’s position in
the value network
Focus of the analysis: understand whether the
operator’s position enables the operator to
implement its intended business strategy in the
value network within the constraints of the market
forces excercised by other participants of the value
network
Analysis of market
forces: with Porter’s
five forces model
(competitive rivalry,
suppliers, customers,
substitutes, new
entrants)
Types of business
strategy as defined by
Porter: cost control,
differentiation or focus
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9. Research Design: Limitations
 Information sources did not allow the examination of
financial aspects, i.e. profits of players and distribution of
profits between players in the value network
 Only public information was available
 Study results based on the selected market players are good
indications, but cannot cover the entire industry
 New, still evolving business models were not considered
In spite of these limitations, the three case studies and
comparing them with each other helped understand the value
creation process related to mobile internet services and gave
indications on mobile operator performance.
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10. Case Studies:
1. Vodafone – Operator-centric Business Model
Vodafone with
Live! portal
Suppliers
Buyers
Vf subscribersMedia Agencies
Substitutes:
independent mobile
portals or device
centric portals
New Entrants: new
mobile operators or
MVNOs with portal
offering
Competitors: other
mobile operators with
portal offering
Content / Apps
Providers
In-search
Advertising
Partner
low
medium
high
low to medium
medium
medium
medium
Compared with other mobile operator portals, Vodafone Live! can be competitive with extensive and
distinctive content. On the other hand, substitutes are a strong threat to reduce Vodafone’s market
share in the domain of mobile internet by taking away subscribers and advertisers or by reducing the
mobile internet spending of Vodafone’s subscribers and advertising customers.
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Arrows in the five-forces model represent
the market force of the actor. The strength
of force is indicated as low, medium or
high.

11. Case Studies:
2. T-Mobile – Device-centric Business Model
T-Mobile’s mobile internet strategy is differentiation by distinctively offering mobile handsets that
enable unique user experience. As long as T-Mobile is handled as a preferred partner by Apple and
other internet enabling smart phone vendors offering valuable mobile internet end-user experience,
the operator can implement its selected business strategy.
T-Mobile
offering iPhone
Buyers:
T-Mobile
subscribers
Substitutes: mobile
operators with
mobile portals or
independent mobile
portals
New Entrants: new
mobile operators
or MVNOs with
portal offering
Competitors: other
mobile operators
with smart phone
offering
Suppliers:
Apple and other
handset
manufacturers
low to medium
medium
medium to high
medium
low to medium
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Arrows in the five-forces model represent
the market force of the actor. The strength
of force is indicated as low, medium or
high.

12. Case Studies:
3. „3” – Aggregator-centric BM
„3” strategy for mobile internet is cost leadership by focusing on internet access only at reasonable
costs. Since “3” in this scenario does not differentiate itself by offering any mobile internet related
value added, there is a threat that its market share and revenues are limited by other mobile
operators with similar offers for mobile internet. The threat of operators offering other value added,
such as attractive smart phones to customers (i.e. substitutes), further limits the room of “3” for
implementing its strategy.
“3” offering pure
mobile internet
access on
handsets
Buyers:
“3” subscribers
Substitutes:
mobile operators
with mobile portals
and device centric
portals
New Entrants:
new mobile
operators or
MVNOs with portal
offering
Competitors:
other mobile
operators offering
mobile internet
access on handsets
Suppliers:
Yahoo and other
independent
mobile portals
low
medium
medium
low to medium
medium to high
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Arrows in the five-forces model represent
the market force of the actor. The strength
of force is indicated as low, medium or
high.

13. Strengths
- Strong offering on the basis of agreements with
content publishers and application developers.
- One stop shopping offered to customers
(access, content & applications, services).
- Multiple revenue sources.
- Customer ownership including valuable profile
information to be used for e.g. targeted
advertisements.
Weaknesses
- Live! only focuses on Vodafone’s own subscribers,
i.e. the possible reach of customers limited,
whereas independent portals target all mobile
internet users.
- Vodafone may not be seen as an authentic brand
for value added mobile internet services.
Opportunities
- Increasing number of mobile internet users of
Vodafone’s subscriber base.
- Service bundling to stimulate Live! usage (e.g.
with mobile internet access).
- Advertisement funded content and application
offers to subscribers.
Threats
- Independent aggregators of mobile internet
services and device centric portals (substitutes).
- Instead of using Live! subscribers only use mobile
internet access offered by Vodafone and consume
value objects from substitutes.
- Advertisers rather go to substitutes.
Discussion of Results
1. SWOT-analysis of Operator-centric Model
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14. Discussion of Results
2. SWOT-analysis of Device-centric Model
Strengths
- Strong offering on the basis of agreement with
Apple (and possibly with other smart phone
vendors).
- iPhone users stimulate mobile internet traffic
from which the operator is benefited by access
fees.
Weaknesses
- Value added by T-Mobile is limited to mobile
internet access in this value network.
Opportunities
- Increasing demand for value objects on device
centric portals drives T-Mobile’s mobile internet
access revenues.
- Increasing value added and generating more
revenues by being involved in device centric
value networks more actively by “selling” user
profile information as newly created value
objects to device vendors with portal offering.
Threats
- Customer ownership being taken over by device
vendors.
- End of exclusivity with Apple and / or other
operators increasingly become re-sellers of smart
phone brands.
- Decreasing profits on mobile internet access
provision.
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15. Discussion of Results
3. SWOT-analysis of Aggregator-centric Model
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Strengths
- “3” focus on operator core competence by
offering mobile internet access.
- Strong internet brands, such as Yahoo generate
demand for mobile internet usage from which
“3” is benefited by collecting access revenues.
Weaknesses
- Value added by “3” is limited to mobile internet
access in this value network.
- Overall value delivered to end-users may be lower
because of weak user profile management.
Opportunities
- Increasing value added and generating more
revenues by handing over subscriber profile data
as newly created value objects to aggregators
and receiving a share of related aggregator
revenues.
Threats
- Customer ownership being taken over by
aggregators.
- Increase of price competition with other mobile
operators.
- Decreasing profits on mobile internet access
provision.
- Value added offering by other mobile operators.

16. Conclusion:
Answering the Research Question
Do the business models chosen and implemented by mobile operators enable
them to position themselves successfully in their relevant market (as expanded
by mobile internet opportunities) or will the majority of the value created by
mobile internet be exploited by other players?
 3rd party actors in mobile internet value networks are better positioned
to capture the majority of economic value related to mobile internet
service provisioning, since
 operators can have profitability issues with their most natural offering,
i.e. mobile internet access, and
 face a strong competition of and at the same time are dependent on
global media and other internet brands when offering value added
services, i.e. mobile internet content, applications and advertising as
well as mobile internet enabling handsets.
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17. Conclusion:
Opportunities for Operators
1. Valuable subscriber related assets, such as user profile and location
information can be turned into „value objects” and „sold” to co-operating
3rd parties
 to increase the operator’s share in the (economic) value
creation, and
 also to increase the overall value of mobile internet offering.
2. Operators may also work on managing their roles in all three business
models to “internalize” substitutes and by this improving competitive
position.
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18. Appendix:
Quoted Literature Sources
Ballon P et al, 2008, “An Advertisement-based Platform Business Model for
Mobile Operators”, IBBT SMIT, Vrije Universiteit Brussel, Belgium.
Chesbrough H and Rosenbloom RS, 2002, “The Role of the Business Model in
Capturing Value from Innovation: Evidence from Xerox Corporation’s Technology
Spinoff Companies," Industrial and Corporate Change, vol. 11 (3), pp. 529-555.
Gordijn J and Akkermans H, 2001, “Designing and Evaluating E-Business Models”,
IEEE Intelligent Systems, July/August, pp. 11-17
Li F and Whalley J, (2002), “Deconstruction of the telecommunications industry:
from value chains to value networks”, Telecommunications Policy no. 26 pp 451-
472
Osterwalder A, 2004, “The Business Model Ontology. A Proposition in a Design
Science Approach”, PhD Thesis, HEC Lausanne, Lausanne
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