INSEAD the business school for the world

Selected Case

published: 30 Jan 2012

  • Topic: Strategy
  • Industry: Mobile operations
  • Region: Europe

Abstract:
The mobile industry in Finland in 2005 was facing a price war, which hurt not only the profitability of operators but also their incentives to adopt new technologies (3G). In 2005, the Finnish mobile telecom regulator decided to allow handset bundling and subscription plans for 3G services. This was an opportunity for incumbents to reshape the competitive context in the industry. The case examines the possibilities for Elisa, the second player in a 3-player oligopoly, to introduce new pricing plans to change the competitive context.

Pedagogical Objectives:
The case allows discussion of pricing strategies in oligopoly, particularly with the objective of ending a price war. Possible strategies include handset bundling, price discrimination through subscriptions and different price plans, and new service offerings. Due to the oligopolistic context, a competitive analysis is required to identify possible competitive responsed to pricing actions.

Keywords:
Price Wars, De-Escalation, Mobile Telecommunication, Finland, Price Discrimination, Oligopoly, Pricing, Bundling, European Competitiveness Initiative, European Competitiveness, Europe, Change Management


Share