Growing competition in Europe’s mobile markets
|Competition in European mobile markets has grown significantly in recent years, due to the increasing number of companies providing mobile services. Meanwhile, in many mobile markets customer growth is slowing down, if not stagnant. At the same time, the intensifying competition is leading to downward pressure on end-user prices. The competitive landscape has changed from one in which providers chase customers without terminals to a battle for existing customers already attached to a mobile provider.|
Many of the newer providers have built their business around offering customers lower prices on basic voice and SMS, leading to a negative price spiral. Discount telephony has taken off mainly because it requires such a relatively small investment – and because running costs are comparatively low. This has facilitated the growing provision of basic mobile services at very competitive prices, something that end users cannot fail to note.
In all likelihood, prices will continue to fall as mobile markets enter new phases, where the number of players grows and competition becomes even fiercer. The next wave of mobile players to enter the market will come from the retail sector. More and more retail chains are choosing to enter the mobile universe and establish themselves as mobile providers. Tesco and ALDI have already moved into the mobile space and, true to their nature, focused on basic, no-nonsense mobile services at low prices.
Lower prices and increased competition has forced the established mobile providers to change their tactics, too. Many have already re-evaluated their cost levels and implemented large staff reductions. At the same time, they have cut back on investments in new technology. Companies are holding back on new investments unless their customers are asking for specific products. An example of this is the slowing down of efforts to migrate customers from 2G and 2.5G services to 3G services.
For more information on market phases, and how these will influence the competitive situation for all players in the mobile value chain, read our report How to succeed in the second-generation MVNO market. The report provides insight into the current state of the mobile market, analyses likely future trends and gives companies the tools they need to succeed in it.
How to get success in the second Generation MVNO Market