Value creation and coopetition in M2M ecosystem — The case of smart city

Abstract

Wireless ICT as a subcategory of the ICT industry has long been serving end users as its direct customers. The value for end users, i.e. connectivity as the end product of this industry, has been created in a linear chain where two major group of actors have been cooperating with each other: Telecom Equipment Vendors (TEV) and Mobile Network Operators (MNO). By the demand of other industries for connecting devices/machines in order to enable various services, Machine to Machine (M2M) communications and Internet of Things have emerged as new concepts where Wireless ICT could serve other industries. As a result “connectivity” became an enabler (service) and not the final product. In this paper we argue that linear telecom value chains are incapable of serving this new demand, since wireless ICT requires to co-create value with other industries. This causes the formation of telecom value networks in which traditional telecom actors have to form new (different) business relationships with each other; Cooperation with competitors and Competition with cooperators.