What is a complementary value network?

Complementary value networks or ‘Walled Gardens’ comprise a bouquet of services provided by network operators, handset manufacturers, platform vendors, and content providers.

Example:

Apple: An example is the one created by Apple with exclusive wholesale agreements with AT&T Wireless in the early 2000s for its iPhones. By subsidising the iPhone with long tenure contractual agreements, and creating a proprietary app store, Apple created a walled garden.

Rjio: Recently in India, RJio has forged arrangements with Google for JioPhone Next to create an ecosystem of handsets, connectivity and applications.

These walled gardens often have a “platform captain” (i.e. Apple, RJio) which provides coordinating mechanisms, rules, key products, intellectual property and financial capital.

Platform captains generally derive business benefit from their pole position. Hence, members of a walled garden may aspire for the position of captain. This brings a new element of competition into the telcos-Internet companies’ relationship.

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