Coopetition: The New Age Panacea for Enabling Service Provider Sustainability and Profitability

Abstract

Service providers have always been fazed with a daunting age old question: How should they handle competition to ensure business sustainability and profitability? In this paper, we try to address this question by analyzing collaborative innovation among competitors or coopetition. “Coopetition” is a neologism describing collaboration between business competitors, in the hope of mutually beneficial results. The mobile operators’ quest to evolve from their“dumb bit pipe” role to become more involved in shaping the user experience through collaborative innovation with application developers and content providers is the main driver behind the concept. To understand the benefits of coopetition, we use business systems dynamics modelling to evaluate three case studies: (1) Zero.facebook.com, where Facebook collaborates with mobile operators across the world to bundle a stripped down Facebook application version with a mobile connection, (2) collaboration between Google Voice and Sprint where Sprint adds Over-The-Top (OTT) Google Voice minutes to its mobile plans, and (3) NTT DoCoMo’s i-mode, which was a revolutionary concept in mobile services, as a traditional mobile operator reshaped the consumer experience through customized service offerings and by getting involved in almost all sectors of the telecommunication value chain. The common parameters identified in these case studies, combined with the findings of interviews with over 250 stakeholders across the telecommunications value chain, have been brought together to present an aggregated model. The major contribution of this paper is that the proposed models can be extended further to devise future innovation and/or disruptive technology strategies for sustainability and profitability from the perspective of any stakeholder in the telecommunications value chain. Our paper concludes that to survive and thrive in the new competitive world of OTT Internet players, coopetition is the key.