10:00 AM Independent mobile operators needed to bridge Europe's growing data price divide, finds study

Michelle Donegan

January 10, 2013

2 Min Read
Europe Needs Mobile Mavericks

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

About the Author(s)

Michelle Donegan

Michelle Donegan is an independent technology writer who has covered the communications industry for the last 20 years on both sides of the Pond. Her career began in Chicago in 1993 when Telephony magazine launched an international title, aptly named Global Telephony. Since then, she has upped sticks (as they say) to the UK and has written for various publications including Communications Week International, Total Telecom and, most recently, Light Reading.  

Subscribe and receive the latest news from the industry.
Join 62,000+ members. Yes it's completely free.

You May Also Like