Open business models and platform mediated networks: an application in the mobile industry

Under the Open Innovation paradigm, this paper analyzes emerging models of governance in platform-mediated networks subject to winner-takes-all competition regimes. Our research contends that modularity, an important attribute in technological systems, plays a relevant role in competition dynamics. The study is focused on the mobile networks industry, a highly dynamic and technology intensive sector, ideally suited to conduct research on competition under strong network effects. Based on a case study of an important firm in this sector, the paper finds that proprietary technological platforms require a large set of external contributors to ensure sustainable rates of development and innovation. Our results also suggest that, contrary to established theory, firms may opt for proprietary platforms rather than shared governance models and, nonetheless, they are able to successfully compete against the established ones.