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First-mover and incumbency advantages in mobile telecommunications

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  • Jakopin, Nejc M.
  • Klein, Andreas

Abstract

The present study analyzes data of 191 mobile network operators from 49 countries in order to identify the extent of first-mover and incumbency advantages. A large number of new market entry opportunities and involvement of many previous state-owned monopolists have characterized the mobile telecommunication services industry over the last 20years. The results of this study show that both, first-movers and incumbents in the mobile telecommunication services industry are more successful regarding market share and operational financial results than later entrants. A pioneer position and incumbency are only loosely connected, with success originating both from first-mover and incumbency advantages. Moreover, the timing effect is stronger and more sustainable for market share compared to operating margin, indicating that followers successfully compensate part of their market share disadvantages with strategies like SIM-only tariffs, outsourcing and alternative distribution approaches. In addition, the typical rank-based measurement of timing position reveals somewhat stronger associations than a variable that is using the time elapsed between commercial launches of pioneers and followers.

Suggested Citation

  • Jakopin, Nejc M. & Klein, Andreas, 2012. "First-mover and incumbency advantages in mobile telecommunications," Journal of Business Research, Elsevier, vol. 65(3), pages 362-370.
    • Handle: RePEc:eee:jbrese:v:65:y:2012:i:3:p:362-370
    DOI: 10.1016/j.jbusres.2011.05.009
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    3. Appelbaum, Elie & Katz, Eliakim, 1996. "Corporate taxation, incumbency advantage and entry," European Economic Review, Elsevier, vol. 40(9), pages 1817-1828, December.
    4. Haili Zhang & Michael Song, 2020. "Do First-Movers in Marketing Sustainable Products Enjoy Sustainable Advantages? A Seven-Country Comparative Study," Sustainability, MDPI, vol. 12(2), pages 1-14, January.
    5. Asimakopoulos, Grigorios & Whalley, Jason, 2017. "Market leadership, technological progress and relative performance in the mobile telecommunications industry," Technological Forecasting and Social Change, Elsevier, vol. 123(C), pages 57-67.
    6. Wellmann, Nicolas, 2019. "Hello . . . Are You Still There? An Empirical Analysis How Market Structure Affects Quality of Mobile Networks," VfS Annual Conference 2019 (Leipzig): 30 Years after the Fall of the Berlin Wall - Democracy and Market Economy 203579, Verein für Socialpolitik / German Economic Association.
    7. Prateek Jain & Mabel C. Chou & Faith Fan & Michelle Permata Santoso, 2021. "Embedding Sustainability in the Consumer Goods Innovation Cycle and Enabling Tools to Measure Progress and Capabilities," Sustainability, MDPI, vol. 13(12), pages 1-25, June.
    8. Yao, Xinlin & Zhang, Peiran & Lu, Xianghua & Huang, Lihua, 2020. "Early or Late? Entry timing in online IT service markets and the moderating effects of market characteristics," Journal of Business Research, Elsevier, vol. 114(C), pages 265-277.
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    11. Nakil Sung, 2014. "Declining first-mover advantage in mobile telecommunications markets," The Service Industries Journal, Taylor & Francis Journals, vol. 34(2), pages 89-102, January.
    12. Muck, Johannes & Heimeshoff, Ulrich, 2012. "First mover advantages in mobile telecommunications: Evidence from OECD countries," DICE Discussion Papers 71, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
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