Perceptions of mobile network operators regarding the cost drivers of the South African mobile phone industry

Abstract

Purpose: This study seeks to understand the perceptions of mobile network operators (MNOs) regarding the cost drivers of the South African mobile phone industry from a supply chain (SC) perspective. It also seeks to explore the possible cost interrelationships in the South African mobile phone SC.Research design and methodology: A qualitative case study, involving six willing managers of MNOs, and by using semi-structured interviews, observation and documents, was conducted.Findings: This study suggests that network infrastructure and network maintenance, handsets, logistics, technology, marketing and sales, training and consulting are the cost drivers in the South African mobile phone SC. These cost drivers are interrelated; and they influence one another in the mobile phone SC.Implications: The findings of this study should assist MNOs in their monitoring of cost drivers and in the identification of cost reduction opportunities, in order to remain effective and efficient in the industry. This study’s findings should help regulating authorities (such as the Department of Communications and the Independent Communication Authority of South Africa [ICASA]) to gain insights into the cost drivers of the South African mobile phone industry from the perspective of a network operator, and thus to develop appropriate mobile phone policies.