Very few mobile service provider markets yet have the market share (installed base) structure historically associated with mature markets. That traditional stable pattern tends to have a 4:2:1 pattern, where the market leader has twice the share of the second provider. The second provider then has twice the share of the number-three provider.
Among the salient exceptions is the Australian market, which has the classic mature pattern.
Bruce Henderson, founder of the Boston Consulting Group is credited with a couple of foundational ideas about business.
Among those ideas is mature market structure under conditions of competition.
"A stable competitive market never has more than three significant competitors, the largest of which has no more than four times the market share of the smallest,” Henderson argued.
Sometimes known as “the rule of three,” he argued that stable and competitive industries will have no more than three significant competitors, with market share ratios around 4:2:1.
including the notion of the experience curve, which explains how the cost of products decreases with volume.
Henderson also popularized a rule of thumb about return on investment and the “experience curve.”
“Costs characteristically decline by 20 percent to 30 percent in real terms each time accumulated experience doubles," Henderson posited in 1968.
The point is that it is reasonable to expect that profits are directly related to market share, with a pattern where the leading three firms have something like a 40-20-10 share pattern, or perhaps 35-17-8 pattern.
Source: Reperio Capital
That same pattern tends to hold for return on investment as well.
source: Marketing Science Institute
All that suggests the retail mobile service provider market is not yet fully mature and stable.
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