So there we have it. The EU commission has had its say. Three can’t buy O2. Speaking to numerous colleagues in the industry reaction to the news was met by relief (I’ll let you decide which operator that was) through to surprise and disappointment.
I have to say I was in the surprised camp. I anticipated that the EU would insist on ‘remedy’ actions to balance the market and that Hutchison would accept them to win the prize. Why did I think this? Very simply it worked in Ireland and I can’t see why it wouldn’t work in the UK.
I know from launching the newest MVNO iD in Ireland that remedial action can be very positive. We launched a highly competitive offer and the independent reports fromKillBiller illustrated just how positive it was for the consumer. In fact the tariffs we launched were the best 4G offer in the market for more than three out of four consumers.
When you have the right economic environment for a challenger to come in and change the way things are done, and with the ambition to give consumers much more flexibility and choice, you can’t say remedial action doesn’t work. Where the consumer is rewarded, as in the case of iD there’s a win-win.
But the decision has been made. Pending appeal of course, but regardless one thing remains. O2 is still for sale. And so the speculation begins.
It strikes me that the only really interested parties will be those already established in the telco sector. Those who can make 4G and even 5G a commercial reality. But where does that leave us? Most likely with a repeat of the whole circus again.
Or will it? What if a Sky throws its hat into the ring? It makes a lot of commercial sense to buy rather than set up a more traditional MVNO and it will allow them to take on the TV, fixed and mobile behemoth which is BT/EE with network operator economics.
Would it be viewed more favourably? Possibly. After all, it worked for BT who would hardly be considered a challenger. And the commissioner might see it as a way to balance the market following that deal.
And what of the new kids on the block? There’s an interesting argument to say that the likes of Netflix or Amazon would want a slice of the action. Another string to the bow and way to take market share and a really credible way to give consumers 4G and later 5G so they can gobble up even more of their content.
I can’t help thinking though that the only real way to unleash increased competition is through addressing the established telecoms business model.
Has the time come for the infrastructure light (in telecoms terms) over the top (OTT) operators to make their mark and take consumer share? There is precious little to differentiate the functional offerings of all the operators so we are in a commodity driven market racing towards the bottom in terms of fees with only data showing any real potential for growth.
How long will it be before Amazon Prime not only includes fast delivery for physical items but also free data to consume your TV and movies? Throw in a OTT calling app and the current market will be turned upside down.
MVNO Freedom Pop are already doing really interesting things with OTT calling on a freemium model. Viable advertising or content funded subscriptions must be just around the corner, particularly when you consider the rumours of Google’s interest in MVNO.
Whatever you think, one thing is clear. The Competition Commission will always have the consumers’ interests at heart. That’s a very positive thing to have if it keeps equilibrium in pricing and choice. Sooner or later something will have to give and I think it won’t be long before we see some new faces kicking the tyres on O2.
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