At the request of the Board of Director's, the economics' and marketing department created a report for shareholders to examine the economic and business impact of

Essay by yourikUniversity, Master'sA+, April 2004

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Introduction

At the request of the Board of Director's, the economics' and marketing department created a report for shareholders to examine the economic and business impact of implementing a wireless solution for on-line bill payment. The purpose of the paper illustrates competitive issues and economic assessments that ultimately affect profits. It does this by examining the practices of two major players within the wireless and on-line bill paying industry, Skytel and First Union.

The paper examines the competitive, market, operational, economic affects on supply and demand, as well as conditions of the new economy. It focuses on the financial aspect of electronic transactions and other types of e-bill payments. First Union like other companies trying to cash in the electronic world are all offering some form of wireless services to better serve the consumers. After a the paper identifies major competitors, it describes market and distribution transactions, explains the significance of production inputs, and identifies economic factors that may influence supply or demand, resulting pricing strategy, and the effect of the new economy.

The final section concludes the paper.

Wireless Competition

Introduction

Nobel laureate Joseph Stiglitz writes, "The presentation of the basic competitive model has long been the standard fare of the principles of microeconomics. No student can understand modern economics without a thorough understanding of this basic model." Market forces shape industries and govern competition (Evens and Leder, 1999). Most companies determine prices based on their production costs, consumer demand, and industry competition (Evens and Leder, 1999).

Background

SkyTel Corporation is a wholly owned subsidiary of WorldCom, which provides traditional paging, text messaging, interactive two-way messaging and wireless telemetry services to more than 1.8 million customers, including more than 105,000 corporate accounts. SkyTel offers SkyPager numeric paging, SkyWriter interactive two-way messaging, plus wireless email solutions like SkyTel Mobile Mail...