Matthias-W. Stoetzer, Daniel Tewes
Der Wettbewerb auf dem Markt für zellularen Mobilfunk in der BRD
Nr. 151 / Juli 1995
In 1992 the hitherto existing monopoly in cellular telephony in Germany by DBP Telekom ceased with the commercial launch of the second GSM-network by Mannesmann Mobilfunk GmbH. The number of operators in the market was further increased in 1994 when E-plus took up its PCN-service. By examining the empirical evidence of market evolution this discussion paper evaluates the degree of intensity of competition at the level of network operation as well as service provision and terminal production. Furthermore the study incorporates an analysis of the developments both on the regulatory level and the demand-side.
It is shown that operators have mainly concentrated their competitive efforts on qualitative service aspects, particularly on network specific value added services, whereas price competition has been neglected. Following the entry of the third operator the hitherto collusive pricing behaviour has changed somewhat but the operators yet avoid general price reductions in favour of customer-specific differentiations of pricing parameters.
On the level of service provision the market turns out to be turbulent. Mergers and market exits on one side occur along with new entries on the other side. Until now suppliers have not succeeded in differentiating their service by means of traditional marketing instruments. Here, competition mainly focusses on the subsidization of terminal prices.
The evolution of the terminal market is characterized by a high degree of innovation and a permanent decrease of prices which cannot fully be explained by the above mentioned subsidization. Due to technical progress mobile terminals have become more and more user-friendly in terms of weight, size and usability.
To sum up cellular telephony in Germany represents a dynamic market with high growth rates but intensity of competition differs on the different levels of service production.
Only German language version available.