You already have a view about the consolidation of mobile operators in Europe, don’t you?
Other argue that three mobile operators are sufficient – if one of them has a maverick or challenger mindset. Support for this view can be found in competitive three-player markets such as Finland, Lithuania and Portugal.
Since 2012, the European Union has seen three markets consolidate from four to three mobile operators:
- Austria – where ‘3’ acquired Orange
- Ireland – where ‘3’ acquired O2
- Germany – where O2 acquired E-plus
To these markets, we’ve added the non-EU member Norway – where NetCom acquired Tele2, leaving the market with, at present, only two mobile operators following a 4G spectrum auction which backfired.
The mobile industry is in strong disagreement about if prices went up or not following these market consolidations.
The problem with comparing prices is that promotions disturb the comparability. In addition, advertised prices are most often only valid for new, joining, customers whereas existing customers pay something else. Another issue is that service buckets (and policies) are changed frequently, making it difficult to compare old and new prices.
So we took another approach – identifying seven indicators (based on reported operator data) which would suggest that market competition has been hurt:
- Increased revenues
- Increased EBITDA
- Decreased subscriber acquisition/retention costs
- Slowdown of subscription growth
- Decreased customer churn
- Decreased CAPEX
- Slowdown of mobile data traffic growth
If a majority of these are true – based on reported facts – we should be able to conclude: Yes, market competition has been hurt.
Open the analysis (in slide format): Mobile operator consolidation in Europe: Less is more?
It’s early to conclude on e.g. Ireland and Germany, but if you like the format, let us know and we might keep it updated with the latest reported data.
Who knows, maybe we’ll add Denmark and the UK would the European Commission approve the 4-to-3 mergers there.