1. Introduction
1.1 The measurement of demand
The measurement of demand within the mobile market can be determined by four action parameters, which operators can use:
• price
• quality
• service
• advertising
The implementation for those action parameters depends on the product itself, the phase of the market, the type of company and the market form, including barriers the market offers.
In my homework I will focus on the criteria price and service to give a short explanation of the so called overall concept “Harvard School”. Discussing this concept, the state does not interrupt any action of the market. It includes the assumption that the market will find its equilibrium itself and does not need any interferences.
After giving some general information about the German mobile market, I want to present my results about the development of prices for mobile services. Furthermore, another focus should be the service that operators provide. Therefore especially the innovation of new tariffs and reaction time of the operators will be analysed. Afterwards the German mobile market will be evaluated by an international comparison.
Altogether each topic that is worked out should be finally interpreted towards the measurement of competition within the market for mobile services.
1.2 Price-competition as an indicator to determine the intensity of competition
As aforementioned the action parameters are divided into four main categories. This is done to isolate the effect of each action parameter concerning towards the process of competition.
However, for each single company and the competition on the mobile market it is important to know about the success of the combination of all action parameters, concerning the payoff of the company, as the case may be the result on competition.
Here I want to focus on the price-competition to determine the intensity of competition. Price-competition mainly guarantees the orientation of business operations, all based on the economic principal. A market with functioning price-competition can be seen as a necessary precondition to achieve all goals of competition.
In reality price-competition does not contain as much relevancy as in theory, which can be explained by the analysis of different market forms (e.g. homogen polypol, heterogen polypol…). Different market forms cause particular situations, where the prices for mobile services are determined. For instance, if there is a high degree of possible cost reduction, the price is influenced by that. Within other market forms the latitude of possible prices, which are generated by the operators, determine the prices of mobile services. Whereas in some cases prices can be found as a result of solidary behaviour of the operators.
Furthermore, the action parameter price is not only influenced by the product itself, the phase of the market, the type of company and the market form, including barriers the market offers. It is further influenced by the amount of using this action parameter, which depends on the objectives and the behaviour of the company.
Concerning the current situation of the mobile market there are only four main operators, which provide mobile services to the consumer. Because of that it seems to be logical, that the price-competition is not a sufficient precondition to measure the total degree of competition. The amplitude of possible prices for several mobile services is very low as we will see in the following analysis. Thus, an operator with very expensive services would be less competitive and loose business. Nevertheless, prices for mobile services can differ between the four operators because it is no perfect market and very difficult for the consumer to find the cheapest contract for themselves.
Inhaltsverzeichnis (Table of Contents)
- Thesis
- Introduction
- The measurement of demand
- Price-competition as an indicator to determine the intensity of competition
- User and provider of the mobile market
- Market share
- Number of users and penetration rate
- Churn rates
- Price competition within the German mobile market
- Price index for the service of telecommunication in Germany
- Development of prices for special services
- ARPU rates
- Tariff innovation and reaction time
- International comparison of postpaid services
- The development of subscribers and penetration rates
- Comparison of prices of postpaid services
- Degree of competition at the German mobile market
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This work aims to analyze the degree of competition in the German mobile market by examining price competition and its role in shaping the overall intensity of competition. The paper delves into the interplay of various action parameters, including price, quality, service, and advertising, as they relate to the mobile market. Key themes explored in this paper include:- The measurement of demand in the mobile market and the role of price competition.
- The analysis of price competition and its impact on the German mobile market.
- The evaluation of tariff innovation and reaction time of operators.
- An international comparison of postpaid services, focusing on the development of subscribers and penetration rates as well as price comparisons.
- The determination of the degree of competition in the German mobile market.
Zusammenfassung der Kapitel (Chapter Summaries)
- Introduction: This chapter introduces the concept of demand measurement in the mobile market, emphasizing the role of price and service as key action parameters. It discusses the "Harvard School" concept, where the market is expected to find its equilibrium without state interference. The chapter outlines the focus of the paper, which includes analyzing the development of prices for mobile services, tariff innovation, reaction time of operators, and an international comparison.
- The measurement of demand: This chapter examines the four action parameters that operators use to influence demand: price, quality, service, and advertising. The focus is on price and service, with a brief explanation of the "Harvard School" concept.
- Price-competition as an indicator to determine the intensity of competition: This chapter delves into the concept of price competition as a key indicator of competition intensity. It discusses the limitations of relying solely on price competition, highlighting the influence of various market forms and the importance of considering the combination of action parameters.
- User and provider of the mobile market: This chapter provides an overview of the German mobile market, including market share, number of users, penetration rate, and churn rates. It analyzes the impact of market saturation and the role of low-usage mobile subscribers.
- Price competition within the German mobile market: This chapter examines the development of prices for mobile services in Germany, focusing on the price index for telecommunication services, the development of prices for special services, and ARPU rates.
- Tariff innovation and reaction time: This chapter investigates the role of tariff innovation and the reaction time of operators in the German mobile market.
- International comparison of postpaid services: This chapter presents an international comparison of postpaid services, examining the development of subscribers and penetration rates as well as price comparisons.
Schlüsselwörter (Keywords)
This work explores the dynamics of price competition in the German mobile market, with a focus on its impact on the overall degree of competition. Key themes include demand measurement, tariff innovation, international comparison, market share, penetration rate, churn rates, and the development of prices for mobile services. The paper delves into the influence of various market forms and the role of action parameters such as price, quality, service, and advertising in shaping market competition.- Arbeit zitieren
- Volker Küpper (Autor:in), 2007, Price-competition at the German mobile market, München, GRIN Verlag, https://www.grin.com/document/77306
