Sign up for our newsletter
Technology / Networks

Calm seas ahead as telecoms tempest rages

There’s been plenty of turbulence in the telecoms market in recent weeks. BT wants to acquire EE, Hutchinson Whampoa (owner of Three) wants to acquire O2 and Sky is partnering with Telefónica UK to jump into the already crowded market. The whole thing is beginning to read like the ending part of a rom-com where everyone pairs off, even the couples that don’t really seem that right for each other.

Although the landscape seems to be in a state of flux, Charlotte Patrick, Research Director at Gartner believes that should these buy-outs go ahead, it will be left "relatively stable".

"We’re not really changing the shape (of the market)."

With roughly 10 percent of the mobile market, Three was never really in the top league; EE, O2 or Vodafone, hold around 32, 24 and 20 percent respectively. While the newly consolidated Three and O2 will leapfrog EE to become the largest mobile operator, the number of big players in the market will remain the same.

White papers from our partners

Ofcom, watchdog for the communications industries, shouldn’t find too much to sniff at in the deal, as consumers are hence unlikely to be hit by massive price increases.

Assuming both the BT-EE acquisition and the Sky-Telefónica deals go ahead, there will also now be three companies able to offer quad-play packages of home phone, broadband, TV and mobile – the third being Virgin.

"BT-EE will be in a much stronger position, because not only do they have a proper network with lots of customers, but they also have stores," comments Charlotte. The newly formed BT-EE conglomerate would have roughly 580 stores including franchises, whereas Sky for example has only 250.

Going forward the market looks fairly settled, although, as Charlotte comments:

"It’s quite well-balanced but there are individual questions."

The biggest question Charlotte cited was the eventual fate of Vodafone. As the mobile operator continues to see declines in revenue, it looks likely in coming years that it may be headed for a change, which may come in the form of an acquisition.

Otherwise, current turbulence aside, the market should remain fairly calm.
This article is from the CBROnline archive: some formatting and images may not be present.