Creating a Win-Win in the Telecommunications Industry: The Relationship between MVNOs and MNOs in Taiwan

By Yang, Chyan; Fu, Guey Lan; Tzeng, Gwo Hshiung | Canadian Journal of Administrative Sciences, December 2005 | Go to article overview

Creating a Win-Win in the Telecommunications Industry: The Relationship between MVNOs and MNOs in Taiwan


Yang, Chyan; Fu, Guey Lan; Tzeng, Gwo Hshiung, Canadian Journal of Administrative Sciences


Abstract

This paper assesses the key factors leading to a win-win for both mobile virtual network operators (MVNOs) and mobile network operators (MNOs) in Taiwan by analyzing the latest trends in MVNOs' development. This study applies the method known as planning assistance through technical evaluation of relevance number (PATTERN) to establish a relevant system for researching the factors, and utilizes the multicriteria decision-making (MCDM) method of fuzzy analytic hierarchy process (AHP) to evaluate these factors and the importance of the related issues. The conclusion is that if MVNOs and MNOs hope to create a win-win situation, then the following five factors, listed in order of importance, must be considered: supervision mechanism, facilities dependency, product orientation, complementary business models, and capital connections.

JEL Classification: H830

Keywords: mobile virtual network operators (MVNOs); mobile network operators (MNOs); multicriteria decision making (MCDM) method; analytic hierarchy process (AHP); telecommunications

Résumé

La présente étude évalue les principaux facteurs qui permettent de créer une situation de gagnant-gagnant entre les opérateurs des réseaux virtuels mobiles (MVNOS) et les opérateurs des réseaux mobiles (MNOS) en Taiwan, à partir d'une analyse des dernières tendances de développement des MVNO. Elle se sert de la méthode dénommée PATTERN (planning assistance through technical evaluation of relevance number) pour mettre en place un système adéquat permettant la recherche des facteurs; elle utilise également la méthode de prise de décision multicritère (MCDM) du processus de la hiérarchie analytique (AHP) pour évaluer ces facteurs et leur importance. Les résultats de l'étude indiquent que si les MVNO et les MNO espèrent créer une situation de gagnant-gagnant, ils doivent prendre en compte les cinq facteurs ci-après, présentés par ordre d'importance : mécanisme de supervision, dépendances des installations, orientation du produit, modèle d'entreprise et connections des capitaux.

Mots Clés : opérateurs de réseau virtuel mobile (MVNO); opérateur de réseau mobile (MNO); prise de décision multicritère (MCDM); processus de la hiérarchie analytique (AHP); télécommunications

A regulator should take each society's development and demand into account when opening up the market in order to satisfy customers, promote competition for the overall telecommunications market, and generate economic benefits (Melody, 2001).

The growing trend now is for enterprises to outsource those businesses with inferior strength while tightly controlling their most competitive businesses, such as patents, distribution channels, and products that are highly value added (Zook & Alien, 2001). Mobile network operators (MNOs) need a lot of manpower and material resources to maintain and administer their operational systems. In addition, they have to invest resources to increase their market share and meet consumers' demand. In a diversified society, it is important that people work together on a project, as each of them accomplishes different things (Camillus, 1997).

The emergence of mobile virtual network operators (MVNOs) is more positive than negative for the mobile communications industry as a whole (Matthews & Sweet, 2000). MVNOs resell the mobile communications services provided by MNOs. Though MVNOs inevitably compete with MNOs, these two kinds of companies are interdependent economic entities. It is hence crucial for both of them to position their own market and to avoid any direct conflict (Matthews & Sweet).

In light of MVNO development in Europe, we believe that MVNOs could be the best business opportunity for 3G communications development in Taiwan. This paper intends to probe the major factors that will lead to a win-win situation for MVNOs and MNOs. We investigate the trends followed by MVNOs in the last three years and analyze the strategies that can contribute to the success of Taiwan's telecommunications industry and marketing.

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