The power of fixed mobile convergence: The changes in the telecommunications industry and the role of dynamic capabilities

This chapter provides an in-depth insight into the development of fixed mobile convergence in Germany, thereby investigating the role of dynamic capabilities and how they can enable telecommunication firms to be successful in a converged market. Based on a two-stage, exploratory research method incorporating 17 industry expert interviews and a quantitative survey of 500 German households, we contrast providers' and customers' views on success factors as well as specific convergent services and applications. For fixed-only and mobile-only operators, building and effectively integrating external resources through a customer-oriented partnership strategy and alliancing process will determine success in a converged market. For integrated operators, success will be determined by the effective reconfiguration and integration of resources and capabilities of traditionally separate business units. Dynamic capabilities will be especially important in the areas of product development, marketing, sales and customer service. We hence argue that due to the dynamics within the telecommunications industry the dynamic capabilities view is a useful concept for understanding how firms can transform to meet the challenges of fixed mobile convergence. We conclude by giving recommendations for future research.