Here are 10 points that document that if the political system and regulative authorities understood what is driving competition on the Telco market, some of them would be out of work tomorrow.
|Strand Consult has been working in the global Telco industry for almost 2 decades. Through the years we have seen and experienced a great deal in many countries around the world, when working for our Telecom customers.|
The regulative authorities started regulating the Telco industry when the fixed line market started being liberalised and the first mobile licences were issued. It did not take long before more mobile operators launched on the market and started an intense battle about who could offer customers the cheapest mobile phones. The price of a voice minute was at that time not the most important competitive parameter, although voice minute prices already started to decrease even back then.
Simply put, different types of technology competed side-by-side and companies offering fixed line telephony, broadband and mobile communication have over time significantly improve their products, while end user prices have simultaneously decreased at a pace that would knock the wind out of most other industries.
We have examined how customers have benefited from this competition and what is currently driving competition on the Telco market. Is it the politicians and regulative authorities that are driving competition, or is it the technological development? Read the 10 interesting examples below and judge for yourself.1. The prices of fixed line telephony are still significantly decreasing, but despite this an increasing number of customers are using a mobile telephone as their primary method of communication. The ability of the mobile phone to compete with fixed line telephony has been created by market forces and the technological development that has created the flexibility of having access to telephony regardless of your whereabouts – not by regulation.
2. The competition between mobile operators has resulted in the development of new products that has increase the availability of mobile telephony to everyone, rather than just certain groups in society. The introduction of prepaid products was not a result of regulation, but a result of a creative industry and competition.
3. The price of mobile phones has decreased significantly and the value for money has also significantly increased. This is not due to regulation, but is a result of the technological development and that subsidies offered by mobile operators have often increased customer demand for new smart mobile phones.
4. In many countries customers have better mobile coverage than mobile operators are obliged to offer under the terms of their mobile licences. This is solely a result of competition between operators.
5. The price of international mobile traffic has significantly decreased. This is not just a result of regulation, but also derives from competition that companies like Skype and MVNOs like Lebara and Lyca Mobile have created on the international market.
6. The price of mobile broadband has influenced the price of fixed line broadband. This is not a result of regulation, but due to the technological development that has enabled mobile broadband to compete against fixed line broadband.
7. Cable-TV providers have contributed in increasing competition on the Internet and fixed line telephony markets. This is not a result of regulation, but a result of the technological development that has enabled the offering of these types of services via networks that previously were only capable of delivering television.
8. The whole fixed line telephony market has significantly changed. Today a switchboard is completely different from what we called a switchboard in the old days. This development is not a result of regulation, but a result of the technological development within the fixed line telephony area and especially within the IP telephony area.
9. The media industry, including the yellow pages industry, has been turned upside down. Today customers have easy and immediate access to often free news from all over the world. This is not a result of regulation, but a result of the technological development called the Internet.
10. Postal services around the world are fighting a losing battle over private and corporate customers sending fewer and fewer physical letters. The value of the postal market that handles physical communication is significantly decreasing. This is not due to regulation, but is due to the technological development of the Internet and e-mail.In fact we could go on, there are even more areas where the technological development and competition on the market has resulted in the development of new products and decreasing prices on many other types of communication and business areas. For some reason politicians and the regulative authorities are trying to elevate their role and the importance of their work to a level where it
simply does not belong. On the other hand, isn’t this completely normal tactics from politicians if the case they are fighting for is slightly unpopular? If the EU is unpopular – which it often is – it will always look good in the media when just before their summer holidays, politicians announce that they are going to impose new reductions on European roaming prices in the coming year.
Unfortunately the same politicians do not realise that most of their regulations and price reductions are distorting the mobile market, resulting in companies that develop new technologies losing part of the revenue they were receiving from the companies that are billing roaming revenue – even if the roaming revenue was perhaps too expensive. The result of the politicians’ regulations often only benefits the very largest mobile operators that already have an enormous cash flow and has a negative impact on smaller market players with smaller cash flows and less financial backing.
Perhaps politicians should start taking a closer look at the importance of the technological development for the future development of society? We believe it would be very interesting for politicians to examine how companies like Google, Microsoft, Apple, and Facebook are currently influencing Telco competition and how that influence is affecting Telco market players that are at the same time investing in vitally important national telecom infrastructure.
Strand Consult spends a great deal of time examining and analysing competition both nationally and globally. At our workshops we present the results of our analyses of national, regional and global market players in the telco industry and put our findings into a national, regional and international perspective. Please do not hesitate to contact us to receive more information about our Executive Workshop Concept, where we examine the above challenges and describe various cases that explain some of the mistakes that the regulative authorities have been making for the sole purpose of trying to justify their own existence.
If you would like to learn more about Strand Consult’s thoughts and information about this business area, please do not hesitate to contact us and learn more about how this development will influence your market and company.: Contact Us
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