Investigating Rivalry in Tele-mobile Service Industry in China: A System Dynamics Approach

The current mobile service in China displays a highly dynamic competition between two major operators, China Mobile and China Unicom. Their market share concerning the number of subscriber is influenced by the subscriber base, service quality, pricing policy, etc. Current researches and analyses are mostly direct comparisons of the relative advantage of the two operators, in which weights of every item being compared are chosen almost arbitrarily and the dynamic relationships between these items are usually ignored. This research stands from the view of China Mobile, the bigger and earlier operator, to explore the reason of its shrinking market share after SMS (short message service) becomes popular in China. The dynamics between the service quality, exchange capacity, price in the mobile service are highlighted to show how these factors influence the growth of the total mobile market and the relative advantage in the duopoly as well. Long run and short run effects of these factors are differentiated so as to make it possible to suggest some proper policies for China Mobile to keep the leadership in the market