Technology Diffusion in Multi-Layered Markets: Networks of Interactions in Telecommunications

Abstract

Telecommunications operators function in complex, multi-layered environments of actors, who interdependently co-create value. This study examines telecommunications operators’ efforts to diffuse 5G-technology through collaborative engagements with market actors in other layers. By drawing on theoretical contributions on the value creation of telecommunications services and network economics, we build a conceptual model that reflects the layered market-structure and the unique business ecosystems associated with networking services. Since telecommunication operators enable communication among users, including businesses, user ecosystem properties are a potential factor in the value creation of telecommunications operators. We examine the effect of business ecosystem properties and other structural factors on telecommunications operators’ engagements with complementary actors, considering actors’ ecosystem-affiliation and value creation logic. The findings indicate that the competitive behavior of telecommunications operators significantly influences the collaborative initiatives within business ecosystems. The size of the business ecosystem influences the choice of the engagement partner, whereas time impacts the choice of the number of partners per collaboration. Our results have implications for the management of telecommunications services and future research on network service strategies. Keywords: Telecommunications; Network services; Multi-layered Markets; Technology Diffusion.