Light Reading

Europe Needs Mobile Mavericks

Michelle Donegan
Wireless Bits
Michelle Donegan
1/10/2013
50%
50%

10:00 AM -- Consumers pay far more to use data on their smartphones in European countries that don't have an independent competitive mobile network operator, according to new research from Helsinki, Finland-based consultancy Rewheel. While it's no secret that lack of competition in any particular market results in higher prices for users, this study shows that significant price declines are driven by the operators that Rewheel refers to as "independent challengers." As the Financial Times noted in this article, those challengers are known as "mavericks" by industry regulators. These maverick operators are not part of any incumbent national operator or a subsidiary of one of Europe's five largest mobile operator groups (dubbed, the E5 group) -- that is, Deutsche Telekom AG, France Telecom - Orange, Telecom Italia SpA, Telefonica SA and Vodafone Group plc . Rewheel finds that even when an operator from the E5 group is in a challenger position as the third or fourth biggest network in a market, it does not drive price competition. The best examples of European challengers are 3 in the U.K., Free Mobile in France or Tele2 AB in the Netherlands, now that it has an LTE license. Rewheel shows just how much these operators drive down prices: the lowest available smartphone tariffs in markets without a challenger operator is 140 percent higher than in markets that have at least one maverick mobile operator. (For the study, Rewheel compared the lowest smartphone tariffs in each market for a minimum of 2GB of data and 200 off-net minutes per month.) Also, markets that have an independent challenger have on average 34 percent higher mobile data penetration. The Rewheel study shows how these competitors are needed to make smartphone usage more affordable and pervasive across the EU. The big operators clearly haven't done it on their own. There are such challengers in 14 of Europe's 27 markets, according to Rewheel's study, which didn’t specify the country names. So, where are the upstarts that will take on the rest of Europe's mobile data scene? Perhaps the painful economic situation in Europe is enough to keep would-be investors away for now. But that makes it more important than ever for Europe's regulators to set the conditions that will attract investment from new, independent operators. The upcoming 4G auctions in the region will be good opportunities for regulators to encourage new entrants, like Ofcom in the U.K. has done by designing its auction to ensure that there are at least four 4G mobile network operators. We're hoping regulators will get it right and the rollout of 4G networks will also launch a new breed of mobile operator challengers. — Michelle Donegan, European Editor, Light Reading Mobile

(7)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View
pal.zarandy
50%
50%
pal.zarandy,
User Rank: Light Beer
1/11/2013 | 6:23:22 PM
re: Europe Needs Mobile Mavericks
If instead of being fixated on protecting their existing voice and sms centric business models and revenue streams they would start focusing on squeezing down variable, data traffic related capex and opex - as for example operators in "mobile data progressive", truly competitive markets like in Finland do - they could-áaccommodate-áfar more traffic without hurting their margins. Of course, if the regulatory climate allows them to protect their margins without this extra "stress", why would they bother.

http://uk.reuters.com/article/...
Gabriel Brown
50%
50%
Gabriel Brown,
User Rank: Light Sabre
1/11/2013 | 2:19:21 PM
re: Europe Needs Mobile Mavericks
On the other hand if there's insufficient profit, where's the incentive to build better networks? The industry needs a decent level of profit to innovate.

A lot of the cost reduction we've seen as consumers over the past few years (especially in the UK, for example) is the result of development started/done when the industry had cash to invest.

The danger of a race to bottom is-áthat we'll have cheap services, but not very good ones.
pal.zarandy
50%
50%
pal.zarandy,
User Rank: Light Beer
1/11/2013 | 11:35:48 AM
re: Europe Needs Mobile Mavericks
Mostly bad.

Mobile network operators need to feel a burning pressure to keep innovating and increasing mobile network capacities and spectrum efficiency, ultimately their own competitive cost level advantage of "producing" - or rather delivering a GByte on their network.-áEven if they are confronted by the realities of flat or even declining market revenues, and maybe even that they themselves will not be able to grow any more their revenues.

If local regulators, competition commission, allows spectrum pooling and extensive active network infrastructure sharing, there will be not much incentive for the MNOs to push down cost per Gbyte. Especially not in light of the threat of voice and SMS cannibalisation. Why would they bother swapping their network gears for more modern, higher capacity, much cheaper platforms and negotiating better pricing deals with their infra vendors if at the end of the day their competitors are using the same cost level and everybody is more or less happy with their 50, 30, 20% market shares and existing margins?

Would the breathtaking speed of innovation, growth of processor power, memory, screen size have happened in smartphones, if the device market was a closed market with hard barriers of entry like in the case of service providers, if the few incumbents like Nokia, RIM, etc would have been "allowed" to start sharing the development of their hardware and software platforms? Definitely not.
Michelle Donegan
50%
50%
Michelle Donegan,
User Rank: Light Beer
1/11/2013 | 11:21:35 AM
re: Europe Needs Mobile Mavericks
Given the report's findings, you also have to wonder about how network sharing and spectrum pooling will affect consumers -- will these trends be good or bad for consumers?
Michelle Donegan
50%
50%
Michelle Donegan,
User Rank: Light Beer
1/10/2013 | 7:42:09 PM
re: Europe Needs Mobile Mavericks
Most countries weren't called out for their smartphone pricing, but the top four priciest markets were the Czech Republic, Greece, Hungary and Germany, based on Rewheel's data, which was collected in December 2012. -áAnyone surprised?-á
Michelle Donegan
50%
50%
Michelle Donegan,
User Rank: Light Beer
1/10/2013 | 7:37:34 PM
re: Europe Needs Mobile Mavericks
The 27 EU countries are diverse by any comparison. But Rewheel found that the tariffs for the smartphone plans it compared (that is, at least 2GByte data and 200 off-net minutes per month) ranged from 8 euros to 78 euros. That's a massive gap and it's bound to raise eyebrows in Brussels.
More Blogs from Wireless Bits
Undercuts Huawei and ZTE in China Mobile 4G tender
CTO says vendor is seeking insight and inspiration from developer competitions
After a few months away, Sarah Reedy is back on the Light Reading team
Four new focus areas for NGMN Alliance highlight the key challenges facing mobile network operators in 2013
9:00 AM Smartphones have bigger mobile data appetites than tablets in Europe
Flash Poll
From The Founder
It's clear to me that the communications industry is divided into two types of people, and only one is living in the real world.
Jonestown
Mobile Backhaul: Going to the Dark Side?

10|30|14   |   2:26   |   (0) comments


Heavy Reading's Patrick Donegan shares his view on a dark trend that bubbled up at Light Reading's annual backhaul conference in NYC.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview With CEO of SwitchCom

10|30|14   |   4:13   |   (0) comments


SwitchCom, an IT company based in Angola, recommends a variety of Huawei solutions and hardware to their customers in the energy industry.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview With Ethiopia's Ministry of Water Irrigation & Energy

10|30|14   |   4:08   |   (0) comments


Gosaye Mengistie of Ethiopia's Ministry of Water Irrigation & Energy discusses the collaboration with Huawei in that country.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview with Dongfang Electronics Corporation

10|30|14   |   5:46   |   (0) comments


Dongfang Electronics Corporation, headquartered in Chengdu, China, is one of China's largest manufacturers of power generators and contractors of power station projects.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview with Zimbabwe's Customers

10|30|14   |   3:31   |   (0) comments


Representatives of Zimbabwe's Ministry of Power and Development discuss the energy needs of their country as well as new areas of improvement due to enhanced ICT capabilities.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview With Colbún Chile

10|30|14   |   4:29   |   (0) comments


In Chile, an aging energy infrastructure was in dire need of a modern update. Claudio Valenzuela of Colbún discusses how Huawei's ICT solutions continue to provide crucial information to improve the grid and how an in-country engineer is a cricial asset.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview With YuLiao

10|30|14   |   6:27   |   (0) comments


Yu Liao, chairman of the Chinese Association for Renewable Energy in Germany, discusses the role that ICT solutions play in helping to grow renewable energy resources in Germany.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview

10|30|14   |   2:54   |   (0) comments


Sifang has been working with Huawei on several projects. JingTao Wu, Assistant President of Beijing Sifang Automation Co. Ltd., believes that the cooperation with Huawei can facilitate Sifang's process of internationalization.
LRTV Huawei Video Resource Center
A Better Connected Smart Grid: Powering Laos

10|30|14   |   5:38   |   (0) comments


Representatives of Electricite Du Laos (EDL), a state-owned corporation, discuss the importance of ICT solutions in serving their country's energy needs.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview With Junwei Lu

10|30|14   |   4:50   |   (0) comments


Professor Junwei Lu of Griffith University Australia describes his work with micro grid technology and the future of the power industry.
LRTV Documentaries
The Next-Gen Network Disconnect

10|29|14   |   01:23   |   (2) comments


There's a lot of talk about making networks more simple with SDN, NFV and next-gen broadband technology – but what about the complexity of introducing such capabilities?
LRTV Custom TV
Grow Your VPN Service Revenue

10|27|14   |   4:00   |   (0) comments


Watch how CSP product managers can better differentiate and maximize the value of their Internet, VPN and cloud services for business services customers, by adding premium application performance visibility to their data services.
Upcoming Live Events
November 6, 2014, Santa Clara
November 11, 2014, Atlanta, GA
December 2, 2014, New York City
December 3, 2014, New York City
December 9-10, 2014, Reykjavik, Iceland
February 10, 2015, Atlanta, GA
May 6, 2015, McCormick Convention Center, Chicago, IL
May 30, 2015, The Westin Peachtree, Atlanta, GA
June 9-10, 2015, Chicago, IL
Infographics
WhoIsHostingThis.com presents six of the world's most extreme WiFi hotspots, enabling the most epic selfies you can imagine.
Hot Topics
Microsoft's Skype Embraces WebRTC on IE
Sarah Reedy, Senior Editor, 10/27/2014
FTC Slaps AT&T With Throttling Lawsuit
Sarah Reedy, Senior Editor, 10/28/2014
Wheeler Gets Down With OTT
Mari Silbey, Independent Technology Editor, 10/29/2014
China's MVNOs Hit the Wall
Robert Clark, 10/27/2014
Let's Not Kill SDN & NFV With Silos
Francois Locoh-Donou, Senior VP, Global Products Group, Ciena, 10/28/2014
Like Us on Facebook
Twitter Feed