Telefonica Deutschland Launches O2 Cloud Storage Service

Telefonica Deutschland said that it will offer the new O2 Cloud Pro service, beginning on 3 March, for €4.99 (US $5.40) per month. The service offers unlimited storage on certified EU servers based in Ireland. Users can share data, tables and presentations by using a link protected by a password or just by an expiration date. 

The minimum contract term is one month, and the service is free the first month. The O2 cloud contract ends automatically when the mobile contract signed in conjunction with it terminates. Users can download data up to 30 days after the end of the contract. 

Also beginning on 3 March, the company will offer tariffs for small companies and self-employed subscribers with unlimited calls and texts from Germany to the EU. With the O2 HomeSpot4 and the O2 My Data Spot Unlimited tariff, O2 offers self-employed people a stationary high-speed internet connection as an alternative to the fixed network. Self-employed people who are existing customers can purchase the mobile Wi-Fi router together with the O2 my Data Spot Unlimited for €19.99 (US $21.66) a month.

Without trying to be all things to all people, there is a great deal that mobile operators, especially large ones, can do to increase their appeal to different kinds of subscribers and increase their overall relevance in an ever more diverse global marketplace.

Cloud storage services are one example of a value-added service that an operator can profitably offer its subscribers. Cloud storage is more and more popular relative to local hard drives, and while individual consumers may be satisfied with the storage that comes with their Gmail or Apple account, businesses are likely to need more. A small business or a home-based business operated by a self-employed person will be in the market for a low-priced offer with flexibility and convenience, and by making O2 Cloud Pro available to those who are not Telefonica subscribers, the operator is maximizing the reach of this offer. Of course, storage that is seamlessly linked to existing mobile accounts is likely to be particularly appealing, so O2 Cloud Pro will likely also be a force for subscriber acquisition. Telefonica Deutschland’s simultaneous offer of plans with hotspots for small businesses and self-employed users is in keeping with the focus on this client demographic.

O2 being the U.K. brand of the Spain-based parent company of Telefonica Deutschland, the branding of this offer under that name appears to be an attempt to broaden its target demographic to users in the U.K. as well as the EU, in light of the Brexit agreement having come into effect on 31 January.

Tarifica is the global leader in monitoring and analyzing telecom pricing. Covering hundreds of operators in every region of the globe, Tarifica’s databases of mobile and fixed line data and voice tariffs are among the largest and most in-depth in the world. Tarifica is also a leading publisher of benchmark and other pricing reports, and its analysts are recognized authorities in the telecom industry, relied upon by operators and businesses worldwide for pricing insight and guidance.  

To learn more about Tarifica, please visit www.tarifica.com 

Telefonica Germany Launches Speed-Based Unlimited Data Plans

Telefonica Germany announced the launch of a new set of O2 Free Unlimited tariffs, beginning on 4 February. The new plans are based on internet speeds. 

The O2 Free Unlimited Max offers unlimited data at the maximum available speed—up to 225 Mbps—for €49.99 (US $55.44) per month, while the O2 Free Unlimited Smart provides unlimited data at up to 10 Mbps for €39.99 (US $44.35) per month. These two plans are ready to be used for 5G, as well as 4G/LTE. The O2 Free Unlimited Basic plan offers unlimited data over 4G/LTE only, at speeds up to 2 Mbps, for €29.99 (US $33.26) per month. 

All three tariffs include unlimited calls and texts and EU roaming. They are also available in the Flex version, meaning that customers may cancel them at any time with 30 days’ notice by paying an additional €5.00 (US $5.55) per month.  

While most mobile tariffs base their data pricing structures on the quantity of data consumed, this suite of offerings from Telefonica Germany is unusual in basing it entirely on the speed of the data. Put another way, the operator is making a distinction between service tiers based on speed, while offering equal—indeed unlimited—amounts of data across all three tiers. This is interesting and potentially appealing in that it allows for all subscribers to O2 Unlimited service to have unlimited data, while still enjoying some freedom of choice as to their needs and the concomitant ability to keep the price down if desired.

The operator’s price structure is also designed to incentivize subscribers to take the higher tiers, given that a €10.00 (US $11.09) increase in cost per month gives one a fivefold speed increase from the bottom to the middle tier, while the €10.00 increase from the middle to the top tier delivers more than a twenty fold increase in speed. The plans are equal in other respects, with all three boasting unlimited calls and texts, as well as roaming in the EU.

In terms of how this offering will actually perform in the marketplace, one key question to be answered is how much users actually care about speed when it comes to mobile devices, or rather how much they care about this much speed, in the context of the coming of 5G. For a sizable contingent of users, 225 Mbps (download) will be overkill, so they will be content with 10 Mbps or 2 Mbps. For those users who really want or need 225 Mbps, 5G will be the way to go soon if it is not already, and with that ultra-high-speed service even higher speeds than that may be realizable. On the other hand, under the current offering even the middle (Smart) tier can access 5G, in which case the speed achieved may be much higher than 10 Mbps.

Another question is to what extent these speeds are notional rather than real. In other words, when advertising speeds “up to” a given figure, the operator may in fact be speaking of a best-case scenario that is rarely achieved. In any case, though, we feel that from a marketing point of view, the concept of distinguishing between unlimited-data offerings based on speed is basically a sound one. 

Tarifica is the global leader in monitoring and analyzing telecom pricing. Covering hundreds of operators in every region of the globe, Tarifica’s databases of mobile and fixed line data and voice tariffs are among the largest and most in-depth in the world. Tarifica is also a leading publisher of benchmark and other pricing reports, and its analysts are recognized authorities in the telecom industry, relied upon by operators and businesses worldwide for pricing insight and guidance.  

To learn more about Tarifica, please visit www.tarifica.com 

Telefónica Launches O2 in Spain

Telefónica has introduced its O2 brand in Spain. Targeting the budget market, O2 will feature mobile-only and convergent (fiber plus mobile) offerings. The mobile plan comes with 20 GB of data plus unlimited national calls and SMS for €20.00 (US $23.58) a month, while the convergent offer includes the same mobile service plus symmetric fiber broadband with speed up to 100 Mbps and a landline with unlimited national calls for €45.00 (US $53.06) a month. Customers may also add up to three additional mobile lines with 10 GB of data, unlimited calls and SMS for €15.00 (US $17.69) each.
 
O2 will be activated in “beta mode” in the coming days, ahead of a mass market launch that Telefónica said would take place “after the summer.” Telefónica stated that O2 will be a “premium” service, while its youth-oriented Tuenti brand will be maintained as a low-cost alternative.
 
Telefónica said that because of Spanish regulations from 2016 having to do with competition in the fiber market, these prices will only be applicable in the 66 municipalities that the regulator, CNMC, deemed competitive. In other municipalities, the O2 convergent offer will cost €58.00 (US $68.39) a month, but the operator said it will implement a system to compensate customers for the €13.00 (US $15.33) price difference and adjust the price accordingly whenever the city becomes a competitive area.
 
It appears that in introducing the O2 brand in Spain, Telefónica is aiming at a market sector that is budget-conscious but that nonetheless wants converged offers with fixed line service. The fact that the operator intends to keep its MVNO Tuenti intact indicates that it considers the market for O2 to be a distinct one. Tuenti, which originated as a social-media network, is for the youth demographic in particular and offers the lowest prices. By launching another MVNO under the O2 brand—which already has name recognition from its operations in the U.K. and Germany, Telefónica can capture a new market without compromising either its Tuenti brand or its main brand for MNO service, Movistar. Maintaining O2, which is being characterized as a relatively “premium” service, alongside Tuenti and Movistar enables the operator to slice its market more finely.
 
O2, which boasts low prices but offers landline and fiber internet for the home, will likely be quite appealing to those users who want more than just the least expensive mobile-only option—although O2’s mobile-only offer is competitively priced. Telefónica is the leader in fiber development in Spain (thus the strictures placed on it by the regulator with regard to the 66 municipalities), which is itself the number-one country in Europe for fiber-to-the home penetration. Fiber has proved to be a key differentiator among Spanish operators, and Telefónica’s competitors Vodafone and Orange have had to play catch-up.
 
With O2, Telefónica is mounting a direct challenge to the smallest of Spain’s four operators, MasMóvil, which has been growing its market share very rapidly recently. MasMóvil also offers converged services (fiber and mobile) at low cost and with a very simple pricing structure.

Tarifica is the global leader in monitoring and analyzing telecom pricing. Covering hundreds of operators in every region of the globe, Tarifica’s databases of mobile and fixed line data and voice tariffs are among the largest and most in-depth in the world. Tarifica is also a leading publisher of benchmark and other pricing reports, and its analysts are recognized authorities in the telecom industry, relied upon by operators and businesses worldwide for pricing insight and guidance.  

To learn more about Tarifica, please visit www.tarifica.com 

Telefónica Launches O2 in Spain

Telefónica has introduced its O2 brand in Spain. Targeting the budget market, O2 will feature mobile-only and convergent (fiber plus mobile) offerings. The mobile plan comes with 20 GB of data plus unlimited national calls and SMS for €20.00 (US $23.58) a month, while the convergent offer includes the same mobile service plus symmetric fiber broadband with speed up to 100 Mbps and a landline with unlimited national calls for €45.00 (US $53.06) a month. Customers may also add up to three additional mobile lines with 10 GB of data, unlimited calls and SMS for €15.00 (US $17.69) each.
 
O2 will be activated in “beta mode” in the coming days, ahead of a mass market launch that Telefónica said would take place “after the summer.” Telefónica stated that O2 will be a “premium” service, while its youth-oriented Tuenti brand will be maintained as a low-cost alternative.
 
Telefónica said that because of Spanish regulations from 2016 having to do with competition in the fiber market, these prices will only be applicable in the 66 municipalities that the regulator, CNMC, deemed competitive. In other municipalities, the O2 convergent offer will cost €58.00 (US $68.39) a month, but the operator said it will implement a system to compensate customers for the €13.00 (US $15.33) price difference and adjust the price accordingly whenever the city becomes a competitive area.
 
It appears that in introducing the O2 brand in Spain, Telefónica is aiming at a market sector that is budget-conscious but that nonetheless wants converged offers with fixed line service. The fact that the operator intends to keep its MVNO Tuenti intact indicates that it considers the market for O2 to be a distinct one. Tuenti, which originated as a social-media network, is for the youth demographic in particular and offers the lowest prices. By launching another MVNO under the O2 brand—which already has name recognition from its operations in the U.K. and Germany, Telefónica can capture a new market without compromising either its Tuenti brand or its main brand for MNO service, Movistar. Maintaining O2, which is being characterized as a relatively “premium” service, alongside Tuenti and Movistar enables the operator to slice its market more finely.
 
O2, which boasts low prices but offers landline and fiber internet for the home, will likely be quite appealing to those users who want more than just the least expensive mobile-only option—although O2’s mobile-only offer is competitively priced. Telefónica is the leader in fiber development in Spain (thus the strictures placed on it by the regulator with regard to the 66 municipalities), which is itself the number-one country in Europe for fiber-to-the home penetration. Fiber has proved to be a key differentiator among Spanish operators, and Telefónica’s competitors Vodafone and Orange have had to play catch-up.
 
With O2, Telefónica is mounting a direct challenge to the smallest of Spain’s four operators, MasMóvil, which has been growing its market share very rapidly recently. MasMóvil also offers converged services (fiber and mobile) at low cost and with a very simple pricing structure.

Tarifica is the global leader in monitoring and analyzing telecom pricing. Covering hundreds of operators in every region of the globe, Tarifica’s databases of mobile and fixed line data and voice tariffs are among the largest and most in-depth in the world. Tarifica is also a leading publisher of benchmark and other pricing reports, and its analysts are recognized authorities in the telecom industry, relied upon by operators and businesses worldwide for pricing insight and guidance.  

To learn more about Tarifica, please visit www.tarifica.com 

Anywhere SIM National Roaming Service to Tackle U.K. Notspots

Anywhere SIM, a new U.K. MVNO launching this summer, has announced that it will offer services allowing subscribers to roam on any U.K. network. The Lancashire based startup will offer a SIM card that will enable users to make or receive calls on the networks of O2, Vodafone, 3 or EE. According to the MVNO, cellular connections will be automatically switched between carriers, depending on which MNO has the best signal in a given location. Anywhere SIM says its offerings will be a good option for users who frequently find themselves in areas of no connectivity (notspots). Initially, the MVNO will offer three different prepaid tariffs, which will not be available on 4G networks. The Anywhere Home tariff, which will cost £0.05 (US $0.08) per voice minute or per MB of data, will allow users to receive calls via any network, but they must make outgoing calls or access data on O2, which is the home network. The Anywhere UK tariff will cost £0.10 (US $0.16) per voice minute or MB of data, and subscribers can send and receive calls and SMS or access data on any network. The Anywhere EU tariff extends roaming access to 27 European countries. It will cost £0.15 (US $0.23) per voice minute or per MB of data. The cost of sending and receiving SMS on all tariffs will be £0.05 per SMS.

 Last year, U.K. consumers were optimistic that the country’s major MNOs would create a solution similar to Anywhere SIM’s offerings as a way to get rid of notspots. Sajid Javid, who was Culture Secretary at the time, tried pressuring the mobile operators to offer national roaming, after Prime Minister David Cameron complained about not receiving a mobile signal in his home constituency and when traveling around the country. The mobile operators rejected the idea of national roaming and instead agreed to the request from Ofcom, the U.K. regulator, to build out their infrastructure, particularly in the country’s rural areas. Anywhere SIM’s launch as an MVNO is a clear indication of the lack of mobile coverage that exists in the U.K. What is not yet clear is how successful the MVNO will be in solving the coverage problem, considering that its offerings do not look particularly appealing. MVNOs generally provide plans tailored to meet the needs of budget-conscious consumers, but all three of Anywhere SIM’s tariffs are priced relatively steep compared to offerings from other U.K. MVNOs and MNOs. In addition, network switching is not seamless when a user moves to a different location after establishing a call or data connection. While we applaud Anywhere SIM for trying to tackle the U.K. notspot problem, its attempt, while not the end-all solution may be the catalyst for a solution.


The above item appeared in a recent issue of The Tarifica Alert, a weekly resource that analyzes noteworthy developments in the telecoms industry from around the world. Contact Tarifica for a subscription to the Tarifica Alert. 
Tarifica is the leader in monitoring and analyzing telecom pricing, covering hundreds of operators in every region of the globe. Tarifica’s databases of mobile and fixed line data and voice tariffs are among the largest and most in-depth in the world. Tarifica is also a leading publisher of benchmark and other pricing reports, and its analysts are recognized authorities in the telecom industry, relied upon by operators and businesses worldwide for pricing insight and guidance. Click here to contact a Tarifica Analyst.

3 UK Revokes Promise of No Mid-Contract Price Increases

Mobile operator 3 UK has recently informed consumers that it will not be upholding its commitment not to increase prices mid-contract for customers who have taken out a new contract or upgraded an existing one after 29 May 2015. These subscribers are being told the following: “Each May, your monthly package price will increase by an amount up to the retail price index (RPI) rate, published in February that year.” A 3 spokesperson elaborated that the operator’s new terms and conditions, which are being introduced this year, will be made clear to subscribers when they enter into their new contracts, and that subscribers will see their first RPI increase in May 2016. The institution of this new price increase by 3 leaves Vodafone as the only U.K. operator that is not raising its prices mid-contract.

This announcement from 3 is quite different from the original pledge it made in January 2014 in response to the guidelines of Ofcom, the U.K. regulator, which were intended to prevent fixed and mobile operators from increasing prices while customers were still within their contract period. Even with Ofcom’s one caveat, which allowed operators to impose increases based on inflation seen in the RPI, at the time 3 UK took a pro-consumer stance with regard to increases that could be made based on this index. Whether 3’s about-face on this point will have a negative effect on the operator through churn remains to be seen, particularly because other operators in the U.K. have mid-contract price increases. In 3’s case we cannot help but wonder if its recent acquisition of O2 in the U.K. played a role in bringing about the implementation of mid-contract price increases. While this merger will make 3 the largest operator in the U.K., it no doubt placed a financial burden on it. What is certain, however, is that a business will not hesitate to do what is necessary to react to changes in the economy no matter what type of price commitment it makes.

The above item appeared in a recent issue of The Tarifica Alert, a weekly resource that analyzes noteworthy developments in the telecoms industry from around the world. Contact Tarifica for a subscription to the Tarifica Alert. 
Tarifica is the leader in monitoring and analyzing telecom pricing, covering hundreds of operators in every region of the globe. Tarifica’s databases of mobile and fixed line data and voice tariffs are among the largest and most in-depth in the world. Tarifica is also a leading publisher of benchmark and other pricing reports, and its analysts are recognized authorities in the telecom industry, relied upon by operators and businesses worldwide for pricing insight and guidance. Click here to contact a Tarifica Analyst.

U.K. Mobile Operators Expect Major Changes to Mast Rules

 The CEOs of mobile operators EE, O2 and Vodafone have warned the British government that without major changes to existing rules on phone mast installations, it will not be possible to meet the 90 percent coverage target for 2017. The number of masts must rise to 40,000, versus 27,500 now, according to the MNOs. It costs about £100,000 (US $154,000) to set up a mast, and land fees range from £7,500 to £9,000 (US $11,500 to US $13,900). This contrasts with only £270 to £280 (US $416 to US $432), as set by the Electronic Communications Code (ECC), for standing equipment used by energy firms and other utilities. Operators could save up to £271 million (US $418 million) a year if costs were more aligned, according to the Mobile Operators Association. Furthermore, unlike fixed line operator BT, mobile operators do not have a legal right to enter sites without landlords’ consent. Vodafone UK CEO Jeroen Hoencamp called U.K. planning laws the most “difficult” he has encountered. The deployment of the group’s Project Spring network upgrade is more difficult in the U.K. than in its other markets. “A combination of planning permission and landlords makes it more difficult to quickly develop sites here. We need major changes to the ECC to be able to roll out faster. Installing equipment, whether it is an antenna, masts, or cables, has to be made easier and less expensive to us.”

MNOs are often called upon to invest in improving their network infrastructure, and governments are often exhorted to make more and better-quality spectrum available so that MNOs will have the raw materials to create better networks. However, the case of the U.K. illuminates the need for other kinds of initiatives that are necessary preconditions for networks to provide full coverage across a country. Currently, under British law, land rights issues are standing in the way of MNOs getting access to land upon which phone masts could be installed. And in addition to the access problems—which create an imbalance between mobile and fixed line operators—there is the question of fees, which are about 30 times higher for MNOs than for energy firms and other utilities. We agree with the Mobile Operators Association that if the U.K. government expects the MNOs to reach the stated goal of 90 percent coverage by 2017, the red tape and costs must be vastly reduced. Only the government itself can accomplish this.

Tarifica has been the leading provider of telecom pricing information for close to four decades. It maintains the most robust, in-depth and up-to-date pricing database in the industry, which includes mobile and fixed line rates from over 400 operators in 85 countries, as well as historical data going back to 1997. Tarifica also produces reports, surveys, publications and custom analyses. Its clients include operators, regulators, enterprises and consultants in every region of the globe. 

To contact an analyst at Tarifica, click here.

U.K. Mobile Ad Market Grows 58.9 Percent in 2014

Driven by digital growth, the U.K. advertising market expanded by 5.8 percent to £18.55 billion (US $27.6 billion) in 2014, the largest increase since 2010, according to a recent study, which forecasts that the market will surpass £20 billion (US $29.8 billion) in 2016. Internet advertising—including mobile advertising—grew by 15 percent to £7.19 billion (US $10.7 billion), followed by TV, up 5.8 percent to £4.91 billion (US $7.32 billion). Mobile advertising alone increased by 58.9 percent to £1.62 billion (US $2.41 billion). Internet and mobile advertising are projected to reach £8.13 billion (US $12.11 billion) and £2.33 billion (US $3.47 billion), respectively, this year and £8.99 billion (US $13.4 billion) and £3.13 billion (US $4.66 billion) in 2016. The huge growth and even greater growth potential of mobile advertising in developed markets such as the U.K. should be recognized and monetized by mobile operators. Of all the sectors surveyed in this study, mobile advertising grew the most by far. Partnering with advertisers, helping them tailor and direct content to specific subscriber bases and judiciously engaging in consumer tracking are all essential ingredients for successful MNO strategies in the mobile ad marketplace.

Tarifica is the global leader in monitoring and analyzing telecom pricing. Covering hundreds of operators in every region of the globe, Tarifica’s databases of mobile and fixed line data and voice tariffs are among the largest and most in-depth in the world. Tarifica is also a leading publisher of benchmark and other pricing reports, and its analysts are recognized authorities in the telecom industry, relied upon by operators and businesses worldwide for pricing insight and guidance. Tarifica is a division of T3i Group, a diversified telecom information provider. To learn more about Tarifica, please visit www.tarifica.com.

Google in Roaming Talks With Hutchison Whampoa

U.S. internet giant Google is said to be in talks with Hong Kong-based multinational telecom operator Hutchison Whampoa about gaining wholesale access to the latter’s mobile networks in the U.K., Ireland, Italy and several other countries. Google is understood to be planning to create a global network that will charge the same for calls, texts and mobile data regardless of the customer’s location. Describing it as a “small scale” project, Google previously announced plans to launch an MVNO relying on wholesale agreements in the U.S. and abroad. Neither Google nor 3 UK, Hutchison’s U.K. subsidiary, would comment on the matter.

In January Google announced plans to launch a U.S. MVNO running on two networks (T-Mobile and Sprint), and in March followed that up with an announcement that when the service debuts—originally set for March but now said to be within the next few months—it would initially be compatible only with the latest model of Google’s own Nexus brand smartphone. Compared to the potential agreement with Hutchison that is reportedly afoot, these are “small-scale” plans indeed. If the deal proceeds as projected, Google would be creating an international mobile cellular service that utterly ignores borders and, for its users in the included countries, would put an end to roaming as a concept. We have already written about the trend toward ending roaming in several regions, but this type of agreement could be a game-changer, given Google’s deep pockets and huge reach. And Hutchison, which is in the process of merging its 3 UK operation with Telefónica’s O2 to possibly become the U.K.’s largest mobile operator, would be a strong partner in such a venture.

The above item appeared in a recent issue of The Tarifica Alert, a weekly resource that analyzes noteworthy developments in the telecoms industry from around the world. To access all of the latest articles and issues or to speak with the research team: http://www.tarifica.com/contactus.aspx

Hutchison Whampoa Faces Uphill Battle in O2 Deal

After talks that began in January, Hutchison Whampoa on Tuesday announced its agreement to acquire U.K. operator O2, which is owned by Spain-based Telefónica for a total of £10.25 billion (US $15.2 billion). However, significant challenges from European Commission regulators lie ahead for the two companies. One key concern for competition authorities, of course, is the fact that a merger of Hutchison’s 3 UK with O2 would reduce the number of mobile network operators in the U.K. from four to three. Beyond that, the EC will have to consider whether the deal should be scrutinized only within the context of the U.K. market or within that of the EU market as a whole.

Any deal involving a reduction in competition in a given market is likely to face regulatory hurdles; this one is likely to face even higher ones than usual, or at least greater uncertainty. The question of jurisdiction is one reason. Since both Hutchison and Telefónica are multinational companies with operations in many European countries, major changes to their U.K. businesses will have ripple effects elsewhere, as well. The change in the composition of the EC within the past year is another “wild card” in assessing the deal’s chances. While similar mergers in Germany and Ireland were approved in 2014, the makeup of the Commission has changed since then. Additionally, those deals were green-lighted on condition that the operators in question open up spectrum for more MVNOs—a policy that would not constitute a remedy in the case of the U.K. market, in which there are already many MVNOs. And finally, the merger will have to be considered in light of another proposed merger in the U.K. announced within the last few weeks—BT’s agreement to purchase EE from Deutsche Telekom and Orange for £12.5 billion (US $18.6 billion). Unlike the 3–O2 deal, this one would not reduce the number of MNOs in the U.K., since it involves a fixed and broadband provider acquiring a mobile business to create converged services.

The above item appeared in recent issue of The Tarifica Alert, a weekly resource that analyzes noteworthy developments in the telecoms industry from around the world. To access all of the latest articles and issues or to speak with the research team: http://www.tarifica.com/contactus.aspx

U.K. Office Workers Lose 2.5 Hours per Week Seeking Good Signal

Research released by ip.access, a U.K.- based manufacturer and supplier of small cell solutions, based on a survey of 2,000 office workers at companies of varying sizes, found that the average U.K. worker loses 2.5 hours of work per week seeking good mobile reception for work-related calls while in the office. Extrapolating from that, ip.access estimates that U.K. office workers are spending 2.53 million hours per week seeking mobile reception, thus costing U.K. businesses an estimated £33 million (US $50.6 million) per week. ip.access reports that even in the telecom industry, 50 percent of professionals feel that the mobile signal in their office is inadequate.

This study joins a growing number of recent studies pointing to inadequate telecommunications technology in the workplace in the U.K. Many of these studies monetize the cost of the situation, citing the price that businesses are paying in wasted time as employees hunt for service. In addition, there is the cost in morale due to the frustration felt by employees who are used to a level of mobile service in their personal lives that is not matched in the workplace. Several of these studies, including the one referred to here, are being done by companies that offer their own products and solutions for improving patchy indoor coverage in the workplace, using technologies such as small cells. We feel that the MNOs must approach this issue with urgency and invest in the appropriate available technologies in order to significantly boost productivity and revenue for their business customers. 

The above item appeared in a recent issue of The Tarifica Alert, a weekly resource that analyzes noteworthy developments in the telecoms industry from around the world. To access all of the latest articles and issues or to speak with the research team: http://www.tarifica.com/contactus.aspx

3 UK CEO: Consumer Demand for Quad Play Still Uncertain

David Dyson, the CEO of mobile operator 3 UK, told the Financial Times this week that it is still not clear whether consumers actually want quad play services in the U.K. The operator’s parent company, Hutchison Whampoa, is currently in talks to buy Telefónica’s UK operator O2. Purported consumer demand for converged services was one of the arguments put forward by fixed operator BT when it announced its intention to acquire EE, the country’s number-one MNO. Dyson said that although there does not seem to be much demand for quad play now, customers could be encouraged to adopt it in the future if operators are willing to discount individual parts of the converged packages. “It depends how hard companies push it,” he said. We have written frequently here about growing demand for multiple play packages in many markets around the world and about the mergers between mobile operators and cable providers driven by that demand. Dyson’s statement is certainly a contrarian one, given the general perception in the industry, but he is doing more than just talking. His company is betting on the future of pure mobile service over converged service by moving to acquire another MNO, O2, rather than a fixed operator. EE and BT are pursuing the opposite strategy, following the more conventional wisdom. Cable provider Sky is taking the same approach, interestingly by doing a deal with Telefónica, to offer quad plays using O2’s U.K. network, starting in 2016. 3 UK, on the other hand, not only intends to buy O2 but to keep all of 3’s and O2’s cellular towers in operation after the merger instead of eliminating some to cut costs. This move indicates that 3 views mobile coverage as the most important factor in getting and retaining business. Whether Dyson is right about customer preferences remains to be seen—as do the outcomes of regulatory scrutiny of both the 3–O2 deal and the BT–EE deal.

The above item appeared in a recent issue of Tarifica's "The Story of The Week", a weekly report that analyzes noteworthy developments in the telecoms industry from around the world. For past issues or to learn more about The Story of The Week or to contact the Tarifica Research department:  http://www.tarifica.com/contactus.aspx

Bouygues Telecom Launches LTE in Channel Tunnel

French operator Bouygues Telecom has launched LTE service in the Channel Tunnel for subscribers traveling from the U.K. to France, using the 1,800 MHz band. The operator said that its customers will be able to access LTE in the northbound side of the tunnel starting in May 2015, due to a roaming agreement to be signed with an unnamed U.K. operator.

Bouygues’ launch of LTE in the Channel Tunnel is part of a roaming partnership with rail operator Eurotunnel and U.K. operators EE, O2 and Vodafone. Bouygues is the only French operator to offer the high-speed mobile service to its subscribers, though for the time being it is only available in the southbound side of the tunnel. The fact that Bouygues rolled out its domestic LTE service on the 1,800 MHz band made it “the natural choice of partner for Eurotunnel, alongside other telecoms operators,” as a press release from the operator stated. Olivier Roussat, Chairman and CEO of Bouygues, said, “For us, it is further proof that our decision to use the 1,800 MHz frequency band was a pertinent strategy.”

Bouygues, as well as French operators Orange and SFR, launched 3G connectivity in the tunnel in the northbound direction in 2012, in time for the London Olympics. Full 3G connectivity in both directions took until May 2014, due at least in part to the technological challenges inherent in routing wireless signals to a tunnel that lies 100 meters below sea level. As of mid-December, subscribers of the three British MNOs have LTE access in both directions of the tunnel.

The above item appeared in a recent issue of The Tarifica Alert, a weekly resource that analyzes noteworthy developments in the telecoms industry from around the world. To access all of the latest articles and issues or to speak with the research team: http://www.tarifica.com/contactus.aspx

Vodafone to Ask U.K. Regulator to Set Conditions for British Telecom

In the wake of British Telecom’s announcement that it is in exclusive talks to acquire U.K. mobile operator EE from Deutsche Telekom and Orange, Vodafone plans to ask regulator Ofcom to make sure that BT makes its fiber network equally available to all mobile operators that rely on it, according to a report citing a person familiar with the matter. BT’s Openreach unit sells broadband access to mobile operators on a wholesale basis, and according to the source, Vodafone is concerned that if the deal goes through, BT would favor EE’s traffic over that of its rivals when it comes to internet speed. In a statement, Ofcom said that while it is not able to make any decision on transactions, it “may be asked to provide technical advice to the relevant competition authority.”   The 168-year-old BT has, over the past several years, transformed itself from a declining former state-owned telephone monopoly into a major power in fixed broadband. Its proposed acquisition of EE for US $19.5 billion in cash and BT shares would make it a major player in the converged services market that is rapidly emerging as key in the developed world. Combining EE’s mobile network with the fixed offerings of BT could benefit consumers by lowering prices, but it could also hurt competition due to BT’s unique status as a wholesale broadband provider. Vodafone, the third-largest mobile operator in the U.K. after EE and O2, certainly has reason for concern. If the deal goes through, it is by no means sure that any regulatory entity will take steps to force BT to grant, in effect, net neutrality to all operators that use its fiber broadband network. Whatever the case, though, if BT acquires EE, the pressure will be on Vodafone and O2 to follow suit and find their broadband acquisitions. Already Vodafone is said to be considering a merger with Liberty Global, which conducts cable operations in the U.K. under the Virgin brand.

The above item appeared in a recent issue of Tarifica's "The Story of The Week", a weekly report that analyzes noteworthy developments in the telecoms industry from around the world. For past issues or to learn more about The Story of The Week or to contact the Tarifica Research department:  http://www.tarifica.com/contactus.aspx

UK Regulator Issues Report on Speed and Coverage

Ofcom, the U.K.’s telecom regulator, has issued a new report on the state of mobile broadband. It is based on the results of roughly 210,000 tests from five major cities—Birmingham, Edinburgh, Glasgow, London and Manchester. The study included the U.K.’s four largest MNOs—EE, O2, Three and Vodafone—and ranked them on the following metrics: average download and upload speeds (see graphs below), average time to load a web page and average latency (all of these for 3G and 4G). Also included in a separate section of the report were assessments of each operator’s current 3G and 4G coverage for June 2014 and October 2014. While the results were mixed across the multiple statistics, the strongest performer was EE, which posted the fastest 3G and 4G download speeds, fastest 4G upload speed and highest coverage percentages. With regard to the study, Ofcom Chief Executive Ed Richards stated, “Improving mobile quality of service is an important area of Ofcom’s work. Our research both incentivizes mobile providers to offer a higher quality of service while helping consumers choose a mobile package that best suits their needs.”

Unsurprisingly, the operators that did not perform particularly well have already issued statements calling the study’s results into question. While we appreciate that other operators might have performed better if a different set of cities had been chosen or if more rural areas had been included, we believe the data collection techniques and metrics used in the Ofcom study are statistically sound and that its results provide a relatively comprehensive picture of mobile broadband service in the U.K.

We applaud Ofcom for undertaking this type of serious study and publishing the results in a format accessible to laymen and believe that this represents a strong example of regulatory best practices. We have often criticized regulators for being overly involved in dictating mobile prices and service/coverage thresholds. While these goals are admirable, these kinds of top-down regulation are too often heavy-handed, inflexible and counterproductive. This newest Ofcom study represents a smart step in the other direction. The greatest challenge for consumers in the mobile ecosystem is the abstractness of the product—such things as download speed, network latency and 4G coverage are not intuitively obvious to many—and it is in the interest of each operator to advertise only the metrics in which its network performs best.

Most consumers are capable of weighing the benefits of increased coverage or speeds against greater monthly costs or reduced allotments, but what stops them is the fact that available information is often limited, contradictory or derived from suspect sources. By conducting a thorough survey and publishing the results, Ofcom is creating an environment in which each operator has every incentive to improve its network’s performance, since they know that its progress will be tracked and reported on by an independent actor. We believe that this program will help the U.K. increase its mobile broadband speed and coverage much faster and at much lower cost than the traditional top-down approaches. 

The above item appeared in a recent issue of The Tarifica Alert, a weekly resource that analyzes noteworthy developments in the telecoms industry from around the world. To access all of the latest articles and issues or to speak with the research team: http://www.tarifica.com/contactus.aspx