6/23/2009 1 Outline • E-commerce: definitions & scope • E-commerce: drivers and impacts • E-commerce & telecoms: an uneasy relationship • Telecoms: fixed • Telecoms: mobile • Summary 2
Jan 19, 2015
6/23/2009
1
Outline
• E-commerce: definitions & scope
• E-commerce: drivers and impacts
• E-commerce & telecoms: an uneasy relationship
• Telecoms: fixed
• Telecoms: mobile
• Summary
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6/23/2009
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What is electronic commerce?
• Steinauer, Wakid&Rasberry
(1997): Commerce
conducted through the
electronic exchange of
digitally encoded
information.
• Chaffey (2009): all
electronically mediated
information exchanges
between an organisation
and its external
stakeholders.
Business to
consumer with
transaction
Business-to-consumer
Business-to-business
Electronic commerce infrastructure
EFT + credit cards transactions
A typology of definitions
Source: OECD (1997) Measuring electronic
commerce. OCDE/GD(97)185. Paris, France
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There are many different forms
of e-commerce
Firms Consumers Non-profit
Firms B2B B2C B2G
Consumers C2B C2C C2G
Non-profit G2B G2C G2G
A matrix of e-commerce activity
Source: Priessl, B. (2000) Employment effects of electronic commerce: concepts and
measurement problems,paper presented to the Euro CPR. March Venice.
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Through electronic commerce,
organisations can…
…Enter new markets
…Redefine their business processes
…Improve customer service
…Exploit resources located elsewhere
…Develop new business models
…etc
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Potential efficiency gains for
electronic transactions
Completion
Digital ++ Physical +
Preparation
Routines ++ ++/++ ++/+
Negotiations + +/++ +/+
Source: Verhoest, P., Leyten, J. & J. Whalley (1999) Costs and control in electronic
commerce: a reconnaissance flight, Communications & Strategies, 2nd Quarter
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ICT contribution to labour
productivity (1995-2004)
Source: OECD (2008: 27) The future of the internet economy: a
statistical profile, Paris, France.7
Businesses selling/purchasing
over the Internet, 2007
Source: OECD (2008: 25) The future of the internet economy: a
statistical profile, Paris, France. 8
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Changing value chainsIntermediaries link buyers with sellers. Some have been side-stepped (dis-
intermediation), whilst others have appeared (re-intermediation).
B
U
Y
E
R
S
E
L
L
E
R
LOCATE TRANSACT SUPPLY
- advertisers- retailers- assemblers &cataloguers
- testers &evaluators
- financial &credit services
- clearing &settlement
- POS- legal services
- manufacturers- wholesalers - maintenance- insurance- shippers &forwarders
- warrantee &guarantee providers
Source: Hawkins, R. (1998) Creating a Positive Environment for Electronic Commerce in
Europe. SPRU: Brighton, UK
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A more diverse and complex
industrial landscape is emerging
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Value chains are being
reconfigured• IP is altering the cost structure, and creating opportunities
• Reconfiguration requires focus: customer relationship, innovation or
infrastructure management (Hagel& Singer, 1999)
Source: Li & Whalley (2002: 462)
Deconstruction of the telecommunications
industry: from value chain to value networks,
Telecommunications Policy, Vol.2611
Complex relationships within the
new ICT ecosystem are emerging
• Fransman (2007)
– Divides the ICT ecosystem into: final
consumers, content & applications,
network operators & network
element providers
– Identifies six sets of relationships
between these four layers
– Highlights that the relationships are
multi-dimensional (information,
financial, product & innovation)
– Places ICT within its broader context
– Demonstrates the inherent
instability of the ecosystem
Source: Fransman (2007) Innovation in the new ICT
ecosystem, Communications & Strategies, 4th quarter
6 symbiotic relationships in the
simplified model of the new ICT
ecosystem
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An uneasy relationship
Telecommunications
infrastructure
Economic
activity
Enables
Encourages
development of
Electronic
commerce
EncouragesE-commerce requires
infrastructure, but
challenges how it is
funded
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From a fixed to mobile
telecommunications industry
Source: ITU (2008: 2) Trends in telecom regulation, Geneva, Switzerland14
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Broadband
Broadband
• Is linked to competitiveness
• Gives rise to a range of
socio-economic benefits (e-
health, e-education etc)
• With its adoption being
driven by a range of factors
(such as age, income,
education etc)
Labour productivity and broadband in
selected EU countries (2001-2004)
Source: OECD (2008: 27) The future of the internet
economy: a statistical profile, Paris, France.
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Broadband
Source: ITU (2008: 4) Trends in telecom regulation, Geneva, Switzerland
More a developed than developing country phenomena: A
broadband gap exists
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What drives the numbers of
broadband adopters?
Source: Derived fromWhalley &Howick (2008) Understanding the drivers of broadband adoption: the case of rural and
remote Scotland, Journal of the Operational Research Society, available at www.palgrave-journals.com/jors
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Next generation networks
Source: http://www.btplc.com/21CN
NGN
• IP-based, core networks
• Deliver capacity at reduced
costs cf. previous
technologies/network layouts
• Enable bundling and service
innovation
• But currently there is no
‘killer application’
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Does speed + services = profits
Source: Carter, C. (2007) Future broadband: Policy approach to Next Generation Access, OFCOM,
London 19
It’s a mobile world
Source: ITU (2008: 3) Trends in telecom regulation, Geneva, Switzerland20
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Mobiles facilitate the exchange of
information
Source: Jagun, Heeks& Whalley (2008) The impact of mobile telephony on
developing country micro-enterprises: a Nigerian case study, Information
technologies and international development, Vol.4 (4) Fall/Winter
Information is at the heart of
markets
• Absence, uncertainty & asymmetry
shape how markets develop and
whether trade takes place
•Mobiles can connect buyers with
sellers
•Mobiles save on some activities,
encouraging others
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3 Group
• A 3G ‘pure play’ new
entrant
– Initial ‘value added’
based strategy swiftly
abandoned
– Replaced by a volume
and price sensitive
strategy
– Some data services have
proved to be popular
– Launched mobile Skype
in 200922
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The 3 Group has experienced
declining APRU…12-month trailing average revenue per active user to 31 Dec 2008
Total Non-voice
Prepaid Postpaid Blended
total
%
variance
cf. 31 Dec
2007
ARPU % of total
APRU
UK &
Ireland
£15.77 £38.91 £33.37 -14% £11.25 33.5%
Italy €13.42 €43.50 €25.34 -14% €8.03 31.7%
Australia A$37.04 A$69.67 A$66.54 -3% A$20.76 31.2%
Sweden &
Denmark
SEK122.01 SEK396.77 SEK379.18 -12% SEK137.74 36.3%
Austria €15.11 €34.34 €33.04 -22% €12.00 36.3%
3 Group
average
€14.92 €43.88 €33.50 -16% €11.00 32.8%
Source: Hutchison Whampoa (2009) Annual Report 2008, available at www.hutchison-whampoa.com23
…but it is not alone.
Source: Global Mobile (2009) Despite maturing markets, certain operators succeed in
increasing ARPU in 3Q08, Vol.16 (2) 24
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iPhone
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…but who benefits?Operators introducing the
iPhone have witnessed:
• Increased APRU
• Reduced churn
• Increases in market share
But
• Separating out the iPhone
effects from other factors is
hard to do in practice
Elsewhere
Apple
• Has created a lucrative but
evolving business model
• Has created a reference product,
which whilst not perfect is hard
to beat
Application developers
• Some have benefited from the
low cost/high volume market
• Lock-in through linking mobile &
fixed versions of
products/software
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Global average monthly residential
mobile broadband price, 4Q08
Source: Global Mobile (2009) Operators adjust strategy to increase popularity of mobile
broadband, Vol.16 (8)
27
Monthly fee for 1GB mobile
broadband contract, 3Q08
Source: Global Mobile (2009) Operators in Western Europe differentiate on price and
download limits in mobile broadband push, Vol.16 (2) 28
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Mobile banking
Source: Coyle, D. (2007) Introduction, The transformational potential of m-transactions,
Vodafone Public Policy No 6 29
Pioneers are to be found in
emerging markets
Well known examples include:
• Which business model?
• Ensuring inter-operability
between systems
• Shaping the regulatory and
liability framework
• Building and maintaining trust in
and acceptance of the
service/technology
• Encouraging the use of micro-
payments
Issues:
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Summary
Electronic commerce
• Is associated with many socio-economic benefits
• Exacerbates the existing challenges faced by telecom
companies
• Questions ‘traditional’ funding mechanisms used in the
telecoms industry
• Encourages the search for ‘killer applications’
• Highlights the uneasy (fraught) relationship between
infrastructure and content
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Contact details
Dr Jason Whalley
T: +44 (0) 141 548 4546
F: +44 (0) 141 552 6686
W: www.strath.ac.uk/mansci
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