The Application of Product-Service System in Telecommunications

Abstract

Telecommunications market is a turbulent, competitive, technology and digitalization driven environment. Widespread market, different customer needs, complexity and diversity of products demand new concepts in telecommunications. The objective of the paper is to investigate the application of the product-service system and different forms of servitization in the telecommunications industry. Following a case study approach, the relationship between supplier (the one who develops and offers complete service) and customer (mobile operator) is analyzed. The research includes the analysis of a process for supplier selection for one cloud solution. Three different servitization examples are compared and evaluated. Key elements used for studying cases are ownership of the service, payment model, maintenance and development capabilities. The study offers insight into how companies create integrated packets of products and services and shows examples of good practices. Research confirms that a product-service system can be beneficial for both suppliers and customers in the telecommunications industry. Servitization can give a competitive advantage to the supplier. Servitization can reduce risk and decrease initial investments in the new systems to the customer. The findings of this paper complement the literature for product-service system and offer concrete inputs for companies in terms of how to better organize their business and gain advantage on the market, based on real-life examples.