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Dramatically different price developments for mobile services in India and Switzerland and their underlying drivers

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Abstract:

Purpose - By comparing prices for mobile services in India and Switzerland, this article aims to highlight marginal differences in regulations - besides other significant factors - which can result in totally different price developments. Design/methodology/approach - A holistic approach is used to explain the various drivers behind price developments. Besides costs (including licence fees), customer behaviours (summarized in demand elasticity), competitive behaviour (explained by the applied marketing mix) and termination fees (either as a price stabilizer - if not freezer - or as a relatively marginal cost component) represent the relevant drivers. Findings - The comparative study underlines the crucial role termination costs play in dynamic mobile markets - besides the usually stressed general cost levels and numbers of competitors. Originality/value - As a case study, this paper identifies country-specific factors which would have to be reviewed again before drawing conclusions for other mobile markets and their regulatory success.

Keywords: Contract Costs; Cost Drivers; Finance and Accounting; India; Prices; Switzerland

Document Type: Research Article

DOI: http://dx.doi.org/10.1108/14636690510587225

Publication date: February 1, 2005

mcb/272/2005/00000007/00000002/art00004
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