Customer and Network Value of Mobile Services: Balancing Requirements and Strategic Interests

Abstract

Designing business models for mobile services is a complex undertaking. A business model can be seen as a blueprint of four interrelated components: service offering, technical architecture, and organizational and financial arrangements. Little attention has been paid to how these different components are related to one another. Multiple actors have to balance different design requirements, strategic interests, and business logics to create a win–win situation, in which each actor has incentives to cooperate. Knowledge on the interrelation between and within the four components is needed to enhance our understanding of what constitutes a viable business model. In this paper, the connections between these components are explored by analyzing the critical design issues in business models for mobile services (e.g., targeting, branding, and customer retention in the service domain; security, quality of service and system integration in the technology domain; network governance in the organization domain; and revenue sharing in the finance domain). A causal framework is developed linking these critical design issues to expected customer value and expected network value, and hence to business model viability.

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