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Innovative pricing: a case of pricing for profits on the mobile internet

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  • Andreas Jonason
  • Bo Holma

Abstract

Innovative pricing addresses the pricing challenge faced by mobile operators as a result of the transition from the second to the third generation of mobile telephony. A central issue in the success of this new technology is the charging structure towards end-users. Pricing new services too high will result in a low take-up rate of the service, whereas pricing the service too low could result in low and unsatisfactory revenues. This study presents the results of a consumer study in the UK consisting of a sample of 2000 interviews with potential end-users of third-generation services. The principal conclusion is that the previously accepted price-optimisation theory of charging per megabyte is insufficient for the introduction of wireless broadband services. This opens up a considerably broader and more complex pricing problem that requires a completely different set of theoretical tools and involves a considerable element of innovation in how the price is set.

Suggested Citation

  • Andreas Jonason & Bo Holma, 2004. "Innovative pricing: a case of pricing for profits on the mobile internet," International Journal of Information Technology and Management, Inderscience Enterprises Ltd, vol. 3(1), pages 105-115.
  • Handle: RePEc:ids:ijitma:v:3:y:2004:i:1:p:105-115
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