Posted by: Tom Nolle
All of a sudden, the UK mobile market is getting hot, at the same time it may also be that mobile itself is cooling off. DT and FT have formed a UK joint venture, creating the largest UK operator. But that in itself is an indicator that the mobile market, at least in the EU, is likely consolidating.
When a market commands significant margins and ROI, nobody is anxious to do joint ventures like this one. Economies of scale are important when margins are thin and gaining the best capital and operations economies are critical to survival.
We think that mobile is now under much the same pressure as wireline and largely for the same reason. Mobile data means Internet access, over-the-top competition, and eroding revenue per bit. It also appears that service-layer pushes by operators will start in the mobile space, however, and will then spill over into wireline via FMC.