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 suppuration in competition drives the price closer to marginal cost, diminished economic profit. The competition can come from more companies producing the like product or producing close substitutes. A good preceding(prenominal) can be seen from the recent profit publications of KPN. KPN is the star(p) telecommunications and ICT service provider in The Netherlands, offering wireline and wireless telephony, earnings and TV to consumers, throughout 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 violation of services like Whatsapp. He said, In consumer mobile we put one over been surpr ised by the acceleration in usage of release alternatives for SMS and voice. Customer behavior is rapidly ever-changing as a result of smart phones and new applications booster cable to electric switch of SMS and voice by selective information. This issue is especially identifiable amongst young people and results in strong growth of data usage and substantially less SMS and voice messages....

This trend has a negative doctor on SMS and voice revenues. He quantified the impact of the move of customers towards a substitute which is practically free: finally twelvemonth, jar against, we have seen a 10% gro wth on SMS year on year and currently we see! 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 shoemakers last duet of months. More importantly, he said What we see accident in the Netherlands in our customer base Im convinced that will happen around the globe. The key oral sex is What does this lowly for the Telecom companies around the world? Smart-phones...If you want to operate a full essay, order it on our website: OrderCustomPaper.com

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