Vodafone has a bumpy history when it comes to acquisitions, with some expensive fallouts from large deals of the past. Renewed efforts to buy fixed and cable operators in Europe may fuel speculation even further (if that's still possible) that a sale of its Verizon Wireless stake is imminent, but the equation for Vodafone is far from simple.
EE may be feeling lonely as the only LTE operator in the UK so far, but it looks set to get some company soon as Vodafone gives more details on its investments and rollout plans. Over in France, Bouygues Telecom has also outlined plans for its launch later this year. This all adds up to some much-needed momentum for LTE in Europe.
The European Union's digital chief, Neelie Kroes, made headlines this week with vote-winning pledges to abolish roaming fees next year. At the same time, the GSMA said the European market has lost its way compared to the U.S. mobile market, and partly blames EU regulatory policies that it says "have resulted in a fragmented market structure."
The economic downturn, increased regulation that has affected call termination rates and roaming costs, and the onslaughts from over-the-top players have created a perfect storm for operators. Operators are now taking steps to protect their future businesses, and are exploring ways to boost revenue, but monetising data is hard to do.
How to price LTE services is also currently much in focus due to the varying approaches of operators towards adding a premium to the higher-speed services. It's a difficult balance to get right, and I don't envy the task of pricing strategists at operators.
The European Commission, intent on punishing what it believes to be anti-competitive activity in the form of illegal state subsidies for and dumping by China's equipment vendors, seems to be ignoring the very real fears held by Europe's own equipment vendors that they could be shut out of the lucrative Chinese market as part of retaliatory moves by China.
The jury is still out on the future of Nokia. The company still has a lot of support in its home market from domestic investors and that will be crucial in the months ahead, but patience is clearly running out.
Operators are well aware of the threat that OTT presents, although some of their views--for example, that subscribers only use OTT apps because they are cheap--may be slightly off kilter. Nevertheless, if operators are still in any doubt about the severity of the threat, two reports this week provided some stark figures to illustrate how big a threat OTT is set to become.
France Telecom this week clearly spelled out its hopes for LTE as the operator reported a drop in revenue in the first quarter and described as 'ferocious' the ongoing price war in France's mobile market. Will LTE bring everything that Europe's operators are hoping, however? EE's first quarter suggests it's far from an easy ride, while one report also doubts that LTE will restore pricing power in Europe. Moving to LTE may be a 'no brainer,' but as is always the case in mobile, creating value and service differentiation to drive up revenue will be hard to do.
Vodafone is expanding its Vodafone Red plans to its 14 European markets, "together with the addition of new and compelling customer options." The plans are the operator's answer to over-the-top providers, but how innovative are they really?