Simulating Discount-Pricing Strategies for the GSM-Mobile Market

Authors

Sven Schade, Technical University of Darmstadt Department of Information SystemsFollow
Thorsten Frey, Technical University of Darmstadt Department of Information SystemsFollow
Nezar Mahmoud, Technical University of Darmstadt Department of Information SystemsFollow

Document Type

Research Paper

Abstract

The article analyzes network effects on the German GSM mobile telephony market. The authors use an ACE-approach to examine how a new competitor can successfully gain ground in the market with a discount-pricing strategy. In particular they study the impact of several elements of a mobile phone contract like on-net-, landline- or off-net-fees on the competitor’s market share. It turns out that it is possible to successfully enter the market with a prepaid contract using a discount-pricing strategy where the single fees only marginally exceed the termination rates, which have to be transferred to foreign network operators.

Recommended Citation

Schade, Sven; Frey, Thorsten; and Mahmoud, Nezar (2009) "Simulating Discount-Pricing Strategies for the GSM-Mobile Market," Business & Information Systems Engineering: Vol. 1: Iss. 4, 289-300.
Available at: https://aisel.aisnet.org/bise/vol1/iss4/2