Jarkko Vesa

Regulatory Framework and Industry Clockspeed

This chapter discusses the role of regulation in the evolution of the mobile services industry from an industry clockspeed perspective. Based on the analysis of the Finnish mobile services market it is argued that regulative actions, such as handset subsidy ban, has not only pricing or competitive implications but also structural consequences which may even determine which business models or integration strategies are allowed for the mobile operators. In a fast moving industry like mobile services, it is of utmost importance that regulation does not slow down the natural speed of industry evolution. In a market where new technologies and business models emerge in waves (e.g. the 1st generation of analogue mobile telephony, the 2nd generation of GSM based cellular technology, and the emerging 3rd generations of UMTS technology), policy makers and regulators must ensure that prevailing regulatory frameworks do not artificially force a market to hang on to market structures which may no longer be optimal under the new circumstances.