Smart for whom? Cost ambiguity as corporate strategy in the 21st century telco sector

Abstract

Purpose

This paper aims to expose techniques that telco vendors use for maximising revenue from their clients. Although the five-point strategy unearthed was based on the Canadian telco industry, it is interpreted as generic to the digital-age.

Design/methodology/approach

Findings are based on focus groups with telco vendors and client perception data. Inductive reasoning is used to generalise findings to other distinctively digital-age industries.

Findings

This paper finds five generic techniques that are used within the Canadian telecommunications (telco) industry to ensure that customers cannot control the cost of a smartphone. These techniques are described as an array of telco hybrid offerings, each with its own cost-structure and pricing strategy; the underestimation problem; devices are not geostationary; third-party agreements; and death-by-a-thousand-qualifications.

Research limitations/implications

The research develops theory about modularity and platform technologies.

Practical implications

Findings and insights have implications for strengthening consumer protection arrangements in the teleco industry, as well as other distinctively digital-age industries.

Originality/value

This paper elaborates theory (particularly with respect to platform technologies and modularity). It interprets the flexibility that comes with modern technology as having a specific downside for consumers, namely, the removal of their capacity to control cost. As far as the authors have been able to ascertain, such an interpretation has not hitherto been presented. It is hoped that the classification of findings will become something of a public policy template for ensuring consumer protection.

Citation

Gould, A.M. and Desjardins, G. (2015), "Smart for whom? Cost ambiguity as corporate strategy in the 21st century telco sector", info, Vol. 17 No. 2, pp. 59-79. https://doi.org/10.1108/info-08-2014-0035