2006 Wrap Up. 2007 Predictions.
29th December 2006
2006 was yet another busy year for the
mobile phone industry. One of the common themes for
the year was consolidation, something that it likely
to accelerate during 2007.. at least as far as manufacturers
As usual, there will be a huge number
of handset announcements at the start of the year, peaking
with 3GSM in February. This year has shown that manufacturers
have been anxious to move handsets from "coming
soon" to production as soon as possible, so expect
a major shake up in the retail market by mid 2007.
Carriers and Networks
five biggest multinational carriers are Vodafone, T-Mobile,
Telefónica (who own O2), Orange and 3. Most of
these carriers consolidated some time ago, and there's
been a fair amount of stability in this sector since
Telefónica acquisition of O2.
The big question during 2007 will be
the future of 3. 3G hasn't performed very well
as an investment, and 3 is pretty much a pure play 3G
carrier. There have been rumours for some time that
Hutchison Whampoa (3's parent company) may dispose of
its European networks to another carrier. In the mean
time, Hutchison's strategy has been to slash jobs and
introduce the X-Series
tariff. The flat rate 3G that X-Series offers can be
viewed either as a stroke of genius.. or an act of desperation.
Vodafone has recently been buying
and selling stakes in several mobile businesses, divesting
itself of some long-running investments (such as a 25%
share in Swisscom) while looking to buy other operators,
outright. However, Vodafone is still paying the price
for previous acquisitions (including Mannesmann in 2000)
which have wiped billions of pounds off the company's
assets. Internal boardroom squabbles may also prove
fateful for Vodafone.
Telefónica appears to be extending the O2
brand, renaming its recently acquired Czech and Slovak
operations with the "O2" brand instead of
Telefónica's more usual movistar brand. It's
likely that all future acquisitions in non-Hispanic
countries will be branded as O2.
France Telecom, owner of Orange have
been unifying their non-French services under the "Orange"
name, offering fixed line telephony, broadband and mobile
services under one brand. However, quality has been
slipping, especially in the UK where there have been
high-profile outages of mobile service and broadband
connectivity.. Orange shows no real sign of improvement
and this will most likely be reflected by a significant
drop in market share. T-Mobile is owned
by Deutsche Telekom, a firm that is likely to try to
follow suit into the "triple play" market.
MVNOs (Mobile Virtual Network Operators) such
as Virgin Mobile continue to gain ground worldwide,
although the UK market is pretty saturated with MVNOs
at the moment. Virgin Mobile's owner, NTL Group
is aiming to launch "quadruple play" in the
UK, combining digital TV, fixed line telephone, broadband
and mobile phone services. BT are in a similar
position - an MVNO with a substantial fixed line and
broadband business, but with limited access to the digital
TV market. 2007 will (as usual) have its fair share
of takeover speculation about BT, our guess is that
some sort of tie-up with Telefónica is the most likely
(reuniting it with the ex-BT Cellnet O2 business), but
so far BT has managed to avoid takeover bids.
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