Study On Two-sided Platform Pricing Of Wireless Value-Added Services Based On The Cross-Group Network Externality

Wireless value-added services are typical platform industry with the feature ofcross-group network externalities. On the one hand it satisfies end-users’ diverseneeds of mobile communication, on the other hand it has brought the huge opportunityfor operators and industrial chain’ development. And positive feedback effect of thetwo aspects is notable. In China mobile communication industry current developmentsituation, the role and status of wireless value-added business highlights, and3Gspreads wireless value-added business’ growth momentum. Like any other branch ofeconomic problems, pricing mode is core problems. Research of pricing mobile valueadded services has important theory and practical meaning.In this paper, the main contents are as follows: Above all, the paper introducesthe topic selection background and research significance. And then describestheoretical basis and literature reviews. At present, two-sided market and platformtheory, network externality theory need to be studied. The third chapter discusses thedevelopment of two-sided pricing behavior of the wireless value-added businessplatform, analyzes two-sided users with cross-group network externalities, andsummarized the development of wireless value-added business, platform structure,price structure and cross-group network externalities. The fourth chapter establishsmathematical model based on cross-group network externalities, studies therelationship of platform profit streams and access fee, access fee and cross-groupnetwork externalities, platform profit ptreams and cross-group network externalities,and through the model proves that the existence of cross-group network externalitiesin wireless value-added business. The fifth chapter discusses the previous researchcontent through “Monternet””UTK”and “Tianyi Space”. In conclusion, the papershows research results and innovative points. Further, it notices that the research isinadequate and points out the further research direction.Through the research, this paper draws the following conclusions: First, wirelessvalue-added services are typical platform industry with the feature of cross-groupnetwork externalities, and positive feedback effect of the two aspects is notable. Theutility of the users not only relates with the utility of users on the same side, but alsowith the utility of users on the other side. Second, in wireless value-added businessplatform, the condition of profit maximization is not as the premise of the profitmaximization on any side. Price structure is asymmetry, seriously inclined to one side. It subsidies SP/CP. There is the optimal access Charge makes the platform profitmaximization. Third, the optimal access fee and cross-group network externalities arenegative correlation. Cross-group network externalities enhancement reduces accessfee. When wireless value-added business two-sided users cross-group networkexternality is stronger, platform access fee charged from SP/CP is lower, that isplatform subsidy for SP/CP is higher. Fourth, the rise of cross-group networkexternalities of the wireless value-added business platform inspires SP/CPdevelopment platform application software, and then attracts more end-users’participation on platform, in order to improve the overall profitability of the platform,promote the continuous development of wireless value-added business platform.