Topical Evolution Paths of Mobile Multimedia Services

Much has happened during the last five years on the Finnish mobile communications market. Recent developments include: the introduction of mobile number portability (MNP) in July 2004, the emergence of mobile virtual network operators (MVNOs), price war and hyper-competition followed by consolidation, late deployment of 3G networks, however, with early upgrade to high-speed downlink packet access (HSDPA), and the allowing of 3G handset bundling. The objective of this paper is to study the current state of the Finnish mobile market. This has been done with a mobile operator centric view. Based on a literature study and continuous monitoring of the Finnish market, this paper depicts the current situation on the Finnish mobile market and tries to explain the reasons behind this development due to the changes during the last few years. This paper starts by giving a general description, or introduction, of the current situation on the Finnish mobile market. Then, the influence that the recent price competition has had on the innovativeness of Finnish mobile operators is analyzed shortly, followed by a short analysis also on the influence of consolidation on price competition. This is then followed by a more extensive analysis on the allowing of handset bundling for 3G terminals in Finland, starting from April 2006, and how it has changed the situation for mobile operators in: increasing customer loyalty, raising average revenue per user (ARPU), in service differentiation, and in investment of new services and infrastructure. This paper also attempts to provide some empirical data on what has happened before and after allowing of 3G handset bundling in Finland. In the end the conclusions are drawn.