How Much Differentiation Can A Market Take?

Many mobile operators in mature markets are trying to figure out how to deal with competition from MVNOs, and how the MVNOs themselves are duking it out. When budget airline EasyJet launched its easyMobile virtual network in the UK in March, it promised to shake up the market there with its low-price, no-frills approach, but it’s managed to sign up only 15,000 users since then. The apparent problem would appear to be that the UK market’s already got other MVNOs competing with a similar low-price strategy — so what happens when all these MVNOs are differentiating themselves from traditional operators in the same way? All that differentiation becomes pretty meaningless, as they just replace one set of competitors with another.

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