Exploring the system dynamics competition in Taiwan's mobile market

Abstract

This paper explores the system dynamics competition of Taiwan's mobile service industry for the period: from 1998 to 2009. By using the system dynamics approach, the purpose is to construct Taiwan's mobile operating model based on six subsystems of operators' numbers, subscribers, costs, price, revenue and profit. The principal findings conclude that the system behavior patterns of operators' numbers and price are 'eroding goals' archetypes, subscribers and costs are 'limits to growth' archetypes, revenue is a 'shifting the burden' archetype, while profit is a 'growth and underinvestment' archetype. From the Taiwan's developed experience of PHS and 2G technologies, it is predicting that the operator numbers are very likely to be minimized to a certain goal level irrespective of 3G and Worldwide Interoperability for Microwave Access (WiMAX) networks from the long-term viewpoint of market dynamic competition. Facing the current status of mobile market saturations, whether or not there is still space for new entrants to achieve profit deserves regulators to reconsider the effects of a telecommunications policy. Since Taiwan's mobile market has gone to the saturation level, if the operators strengthen the reinforcing loops to invest a large amount of money and mental effort in order to grow subscribers, this may lead to limited improvement for any substantial profit. Furthermore, Taiwan's three leading precursors should facilitate to achieve their 3G-coverage rate and seriously consider termination of their 2G network service in order to reduce the costs in the near future.