The impact of emerging public W-LANs on the response strategy of incumbent mobile network operators in the German telecommunications market

According to many studies, incumbent companies often struggle to respond adequately when faced with technological discontinuities. This research examines how three incumbent mobile network operators (MNOs) in Germany responded in terms of their strategy to the emergence of the wireless local area network (W-LAN) technology and how they interpreted this potentially disruptive technology in their own strategic context. Additionally, prior empirical results and forecasts on the limited disruptive potential of W-LAN for the German MNOs lacked persuasive firm level evidence to distinguish the real reason for the presented observations and analysis. It is unclear whether the observations are caused by theory-adequate response strategies of incumbent MNOs or by the inherent limited disruptive potential of the W-LAN technology. For this purpose interviews with managers from three major MNOs in Germany were performed to assess and compare their respective response strategies with the theory of disruptive technology. The results were brought together in a cross-case analysis to evaluate how these firms interpret the potential disruptiveness. The analysis of the research indicated significant differences for the respective MNOs between their perception of W-LAN as a potential disruptive technology, their strategic development processes inside the organisation to understand the potential impact of W-LAN on their respective business model, and to enforce an appropriate response strategy and structural implementation. The results indicated that corporate representatives from each incumbent interpreted potentially disruptive technologies like W-LAN from a different perspective and direction depending primarily on the strategic and structural context and their organisation's resources, processes, and values. These findings finally revealed that the incumbent MNOs in Germany were aware of the potential impact of disruptive technologies on their established business, and evidence was found that they considered potential solutions suggested by the literature and added new options like cooperation with entrants to resist in such situations. However, they failed to react in a theory-conform way, which indicates a lack of in-depth understanding of the theoretical implications since W-LAN had a sustaining impact on the MNOs and their response strategies.