Mobile consolidation: Less is more?

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You already have a view about the consolidation of mobile operators in Europe, don’t you?

FourSome people believe that four mobile operators are the guarantee for sufficient market competition. The entry of Free Mobile in France suggests this.

3Other 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.

less than 3The last view – typically represented by incumbent operators – is that three (or even two) are sufficient and market competition can be kept up with MVNOs.

Since 2012, the European Union has seen three markets consolidate from four to three mobile operators:

  • Less is more countriesAustria – 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:

  1. Increased revenues
  2. Increased EBITDA
  3. Decreased subscriber acquisition/retention costs
  4. Slowdown of subscription growth
  5. Decreased customer churn
  6. Decreased CAPEX
  7. 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.

Training_testOpen 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.