The Impact of Whatsapp on Sms Revenue

The meet of new Competition on profitability is a very important phenomenon that we learn in Managerial Economics. The exploitation in competition drives the price closer to marginal cost, chip economic profit. The competition can come from more companies producing the resembling product or producing close substitutes. A good case in point can be seen from the recent profit publications of KPN. KPN is the star(p) telecommunications and ICT service supplier in The Netherlands, offering wireline and wireless telephony, earnings and TV to consumers, lengthwise telecommunications and ICT services to business customers. In their Q1 results multitude call* with analysts,CEO Eelco Blok started by saying Q1 has seen lower than expected revenues in the Netherlands mainly in consumer and business segments. To explain the poorer than expected number he referred to the invasion of services like Whatsapp. He said, In consumer mobile we strike been surprised by the a cceleration in usage of assoil alternatives for SMS and voice. Customer behavior is rapidly ever-changing as a result of smart phones and new applications booster cable to commuting of SMS and voice by selective information. This hack is especially recognisable amongst young people and results in strong growth of selective information usage and substantially less SMS and voice messages....

This trend has a negative reach on SMS and voice revenues. He quantified the impact of the move of customers towards a substitute which is practically free: in the long run twelvemonth, jar against, we have seen a 10% gr owth on SMS year on year and currently we se! e a 10% decline year on year in March on SMS and a percentage is increasing. Thats the trend we ar seeing currently in the Netherlands and accelerating over the cultivation duet of months. More importantly, he said What we see possibility in the Netherlands in our customer base Im convinced that will happen around the globe. The key header is What does this lowly for the Telecom companies around the world? Smart-phones...If you want to render a full essay, order it on our website: OrderCustomPaper.com

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