How Firms Interact and Perform in the ICT Ecosystem

Abstract

This paper analyses the properties and the dynamics of the ICT sector as an ecosystem here firms interact, innovate, and compete through bundling and external growth strategies. By exploring the strategies of firms and their relative performances, we show that the allocation of revenue between the different Layers of the ecosystem does not reflect their respective contributions in terms of investment. The recent development of intermediaries such as search engines or electronic commerce firms is driving a migration of value from Europe and Asia to the United-States. Market players of the ecosystem perform different strategies to capture market value. Network Operators may choose to enter new Layers of activity that are currently yielding higher returns on investment to finance future Next Generation Network Access investments.