What factors affect the demand of mobile telephone products?

Essay by ninaanneHigh School, 12th grade April 2004

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This project is about analysing the factors affecting the demand of mobile telephone products. The case study that will be included is the current state of the UK mobile telecommunications market. The operators to be examined are the four major operators in the UK: BTCellnet, One2one, Orange and Vodafone.

The case study for this project will be based on the current state of the UK mobile telecommunications market and the performance of its four consumer operators.

Before this can be discussed, it is important to understand how mobile telephones have developed over the past decade. Up until about six years ago, peoples mobile telephone calls were carried over analogue transmissions. Analogue transmissions are radio waves, as received by a normal radio. Due to their basic nature, analogue mobile phones where not very secure and they could be "cloned" easily by hackers who wished to make free calls. Because of these setbacks, mobile telephones stayed mainly in the hands of businesses, which needed to contact their employees and didn't worry about the cost.

About six years ago, digital mobile phones came onto the market offering a new way to communicate whilst on the move. Prices went down as the demand for digital mobile telephone went up and mobile phones became more and more popular.

It is very important to note that the UK mobile telephone market is rather unique in the international mobile industry due to the fact that there are only six operators (TIW/Dolphin, BTCellnet, One2one, Orange, Virgin Mobile and Vodafone), only five of which offer services for the consumer and only four of which operate their own network (Virgin Mobile runs over the One2one PCN network). This means that they can operate almost as a cartel in that they can remain powers in the industry whilst keeping their...