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Mobile operators under pressure to merge networks, says Ovum

Bill Goodwin

Mobile network operators will face increasing pressure to merge their networks as they roll out the next generation of mobile broadband, according to leading analyst firm Ovum.

The high cost of moving to fourth generation technology, such as LTE, will force mobile operators to find savings by sharing their infrastructure, said senior telecoms analyst Emeka Obiodu.

Eventually, some countries could end up with mobile phone providers sharing a single network, competing on price, services and mobile content, rather than geographic coverage.


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"Can the industry collectively invest the billions expected for them to migrate to LTE ?" Obiodu told Computer Weekly.

"Prices are perpetually doing down in mobile. Everyone [in the developed world] who needs a mobile phone has one anyway. There is not a new crop of cash left. This is a market where you have to be more efficient rather than expand your services."

The UK is already effectively becoming a two-network country, he said, with T-Mobile, Orange and Three already sharing their networks. Vodafone and 02 have also been in discussions about network sharing.

"Three has arguably the biggest network in the UK and the best coverage within the M25," said Obiodu. "It has achieved economises of scale beyond what Vodafone and O2 could have imagined.

"Despite network sharing, there are massive opportunities to differentiate network quality, particularly using analytics to drive data as fast as possible."

But Obiodu warned that the government would need to relax regulation to free mobile phone operators to merge their networks.

Utilities, such as gas and electricity companies, compete while using a single national infrastructure. Even rival telecoms companies make use of BT's national infrastructure.

"Why does the mobile industry have to maintain separate networks ?" he said.


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