The mobile data market in South Africa is predicted to be a significant revenue contributor for mobile telecommunication operators, such as MTN, over the next five years. In light of the declining revenue from the traditional voice services, most operators worldwide are turning to mobile data as the solution to this problem. However, there is widespread confusion on which is the correct business model to implement in order to maximise the gains from this new market. To add to the complexity, there is also no clear cut technology upgrade path. While it is well understood that the main driver for the mobile data market will be high data throughputs, the industry is still unsure on which is the best route for an operator to follow as it moves from a second generation (2G)to a third generation (3G) network. This dissertation discusses the business model that MTN should implement in order to become the market leader for mobile data in South Africa. A literature survey on the latest market characteristics and forecast for the mobile data industry is presented. The recent developments on mobile data business models is also discussed. The technology upgrades, i.e. GPRS, EDGE and UMTS, available to a mobile telecommunication operator is described in detail. GPRS is the first stage in the evolution from a 2G to a 3G network and offers data rates of 40 Kb/s. EDGE improves on the GPRS technology with data speeds of 59.2 Kb/s per timeslot and utilise the same frequency, radio and switching equipment. UMTS is the final stage and is capable of delivering 2 Mb/s data rates. It operates on a different frequency spectrum, thus, requiring a new licence from the telecommunications regulator. In order to develop a new business model, MTN's current GPRS model is analysed. The poor success rate of this model can be attributed to the high prices being charged for the services and the lack of any "killer applications" to entice the users. The business model focuses on the customer value of service, organisational, technical and pricing models. For the customer value of service, it is shown that MTN must offer cheaper prices for the services, higher data rates and more exciting applications. The pre-paid subscribers should also be allowed access to the mobile data network. The main changes to the organisational arrangement in MTN includes creating sub-departments in marketing, sales and network group to focus solely on mobile data. MTN must develop an integrated services approach and this can only be achieved by developing partnerships with all key players in the mobile data industry, such as content providers and application developers. Due to the high costs, the technology arrangement section proposes that MTN first upgrade the network to be EDGE capable and later implement a UMTS network. The financial arrangement discusses the revenue, pricing and cost model. The revenue model proposes the development of an exciting and attractive mobile portal. New services and applications such as mobile gaming and gambling must be created for the personal consumers. For the corporate consumers, applications and services must be developed for customer relation management, supply chain management and workforce application. A hybrid pricing model must be adopted. A fixed, metered and value based pricing structure should be implemented to make the services more affordable and to gain the maximum revenues. Finally, the various elements that constitute the cost model is examined. The major contributing costs for the operator will be the network upgrade and subscriber acquisition. / Thesis (MBA)-University of KwaZulu-Natal, 2004.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:ukzn/oai:http://researchspace.ukzn.ac.za:10413/1803 |
| Date | January 2004 |
| Creators | Naidoo, N. R. |
| Contributors | Singh, Anesh Maniraj. |
| Source Sets | South African National ETD Portal |
| Detected Language | English |
| Type | Thesis |
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