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Kate O'Flaherty

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By kateoflaherty, Feb 5 2015 12:26PM

What was once a market of five mobile operators is about to become three after BT confirmed today (5 February) it will acquire EE for £12.5bn. With Three also poised to buy O2, consolidation is set to continue.


So what does this mean for the mobile market? With three operator giants, several big MVNOs in Tesco Mobile, Virgin Mobile and the upcoming Sky network, competition could ramp up significantly. This will see sheer scale potentially pushing costs down.


But it could face delays. Behind the scenes, things are more complex: it is likely the regulator will be watching the market closely. According to Matthew Howett, practice leader, regulation at Ovum, the competition investigation for the BT/EE deal is likely to focus on network issues such as spectrum holdings and wholesale access. He points out: "BT was particularly successful in the 2013 4G auction, acquiring spectrum at 2.6GHz - and the inquiry is likely to assess what adding this to EE’s already sizable lot will mean."


This, he says, is further complicated by the planned acquisition of O2 by Three: the combined entity would itself hold a concentration of the lower frequency spectrum - which is ideal for providing coverage - but lack the higher frequency spectrum at 2.6GHz needed for capacity. Howett predicts that there could be a reorganisation of spectrum holdings between the two enlarged operators as a result.


Additionally, Three, O2 and Vodafone are worried the BT/EE acquisition could impact on them getting a fair deal in the future, since they all currently rely on BT's wholesale products for backhauling traffic.


But once these issues are resolved, the consumer can start to benefit. If BT/EE and Three/O2 are approved, the market will comprise three operator giants, several big brand MVNOs, and multiple smaller offerings. Choice will be vast, potentially pushing prices down - which can only be a good thing.




By kateoflaherty, Jan 23 2013 11:26AM

There was a time when the mobile industry thought every brand would launch an MVNO. From Marks & Spencer through to Waitrose and even Manchester Football Club, the rumours were rife.


But the mobile industry's predictions often come early. Just look at mobile payments; the market has been pushing 'the year of NFC' for around four years now.


And after Phones 4u launched its own MVNO yesterday - arguably two years too late - talk began to circulate again. Everything Everywhere, the wholesale provider of Phones 4u's new network, began hinting that it was talking to other brands about launching an MVNO.


There are already more mobile networks than you might think. Carphone Warehouse has its own offering, Talk Mobile; Virgin Media of course also has an Everything Everywhere MVNO; Asda has a Vodafone MVNO; and Tesco Mobile runs on the O2 network. To top it all off, the spectrum action - taking place as we speak - is seeing new mobile operators bid for the rights to new airwaves.


If these networks too choose to provide wholesale networks to brands, the MVNO could really take off in the consumer space, with names such as Topshop or even bands or football clubs launching their own offerings. After all, a specifically-targeted MVNO has a perfectly honed customer base to market to.


The b2b MVNO market is already diversifying, with many small businesses entering wholesale agreements with the big mobile operators. Charities are also gradually entering the fray, while the international calling market is well covered.


Those who take an early advantage in the consumer space could be onto a winner. With big data analytics a real coup for Tesco, which can use Clubcard data to market to customers, it is surprising that more supermarkets don't have MVNOs. As the spectrum auction takes off and 4G becomes a reality, perhaps all the big brands needed was a little push.




By kateoflaherty, Dec 20 2012 10:13AM

The New Year is already looking interesting in the operator space. Ofcom has today (20 December) announced the players that will bid in the 4G spectrum auction, due to kick off in January 2013.


Of course, all the major operators will bid, including Hutchison 3G (Three as its UK arm is known), alongside bigger players EE, Vodafone and Telefonica (O2).


Also unsurprising is BT's part in the auction, through its subsidiary Niche Spectrum Ventures Limited. To be able to compete in an increasingly mobile world, the telecoms group needs its own mobile side - and although the firm did run an MVNO on the Vodafone network, it had little success. A 4G offering will directly allow BT to compete in both the consumer and business space, taking on companies such as Virgin Media, which already offers superfast internet, mobile (albeit through its EE MVNO) and landline.


Virgin Media's name is absent from Ofcom's list, probably due to its MVNO on the T-Mobile network, making 4G spectrum an unnecessary expense. Sky's absence is felt however - it seems to be happy concentrating on the pay TV market rather than launching a mobile offering to compete with its fixed line rivals.


Then there are the unfamiliar names. Also competing in the auction are HKT (UK) Company Limited, a subsidiary of PCCW Limited, which is a Hong Kong based telecoms conglomerate; and Bucks based network supplier MLL Telecom Ltd.


The spectrum auction itself will boost the airwaves available to mobile phones by more than 75% and is likely to drive down prices for currently premium 4G services. It will also break EE's exclusivity in the area.


The auction will not only provide faster download speeds for many still trying to get a 3G signal; judging from the variety of players, it will also add much-needed choice to the operator market.





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