Biography for Keith Mallinson
Keith Mallinson is a leading industry expert, analyst and consultant. Solving business problems in wireless and mobile communications, he founded consulting firm WiseHarbor in 2007.
Articles by Keith Mallinson
The decision on whether or not the proposed merger of O2 and Three in the UK should be allowed has become very political. With the possibility of Brexit following the UK referendum on Jun. 23 and with an imminent European Commission (EC) competition authority decision on the proposed merger of O2 and Three in the UK, a second UK agency is demanding the deal be blocked.
In recently-published "initial conclusions" to Ofcom's Strategic Review of Digital Communications the UK regulator presented its strategy to "make it easier for competing providers to build their own fibre networks, across as much of the UK as is practicable, by providing them with access to [BT] Openreach's network of underground ducts and telegraph poles." This is important to the development and growth of both fixed and mobile services.
Objections by UK and EU regulators to the proposed merger of O2 UK and Three UK fail to take into account the new and expanding ways that innovation and competition may occur, and also wrongly equate rising ARPUs in markets where consolidation has taken place to consumer price increases alone.
It is good that arguments for and against consolidation, including the proposed mergers of BT and EE, of O2 and Three, and the possible structural separation of BT's network from its downstream operations in the UK are being based on extensive evidence and analysis. Nevertheless, that still does not make it easy to make sense of all the facts and figures being selectively presented for and against the proposed changes, and from which markedly differing conclusions are being drawn by protagonists and antagonists respectively.
Smartphones are still too much like blank cheques, or loaded guns, with regard to international data roaming charges. Usage alerts were introduced in an attempt to increase transparency and control for consumers. They are failing to do that. Regulated measures often fail to keep up with market developments. Postpaid calling plans are popular and convenient for operators and customers alike, but they lack even the rather basic control, on total spending, that prepaid calling has always afforded consumers. Much better spending safeguards for LTE-era data usage are required.
It seems regulators and governments prefer impressive-looking obligation targets that are actually rather easy to achieve, while taking as much money as they possibly can out of the mobile sector in spectrum fees. Instead, it would be better to find ways of keeping more money in the sector by reducing auction transfers so that investments in infrastructure and service quality on a more widespread basis can be increased.
Mallinson: Germany's spectrum auction shows how monopoly power can be exploited - and hurt operators
Spectrum is too valuable to be given away. However; a more sophisticated array of operations obligations and commitments could encourage more capital to be invested in improving mobile networks and services, and making them cheaper, rather than simply siphoning off as much money as possible from operators in auction proceeds for governments to spend on other programmes outside telecommunications.
Nokia's integration of Alcatel-Lucent following the proposed acquisition of its rival will be difficult and messy. Some significant rewards will take many years to achieve, if ever. However, very large research and development demands with economies of scale and scope in 4G, 5G and with fixed-mobile network convergence make this kind of transaction inevitable and indispensable.
M2M and the Internet of Things will create demand growth for mobile network connectivity, but revenue potential is mostly in the broader ecosystem implementing entire solutions and in providing holistic application services, such as in security monitoring and home automation. That might also be worth mobile operators pursuing. More fundamentally, however, they must also ensure they seize network services demand growth in general and accommodate it with corresponding cost reductions right across their networks.
We are currently on the brink of dramatic change and market expansion which might well become as significant as the smartphone revolution, with a large proportion of objects communicating with each other and being constantly connected to the Internet. Many of these will connect through wires, fibre and Wi-Fi, and some will use cellular communications to do so. However, most will also become accessible and controllable by personal mobile devices including smartphones and tablets.