It was widely reported that Google stole the show at the 2010 Mobile World Congress in February. Google’s mighty Internet presence loomed over the mobile-operator community as either an oppressor or an opportunity — depending on whether or not you were a operator. But while the Google brand name — like those of Apple and its iPhone and iPad — guarantees headlines, we should step back and look at the state of the operator community in the light of its own evolution. Is the threat from Internet-based services really the issue?
In both developed and emerging markets, operators are suffering flat or declining revenues as markets become saturated and subscribers expect ever-lower prices. Mobile communications have become a commodity. New services are subsidized or given away to ensure loyalty. Those brave enough to charge a premium are undercut by rival operators bidding for their customers.
We see revenues and margin pressure across the board, with no shortage of customers. China has just passed 500 million subscribers, and India reported 12.5 million new sign-ons in December 2009 alone, according to the Cellular Operators Assn. of India. The key European markets, already saturated with GSM service, could see mobile-broadband subscribers rise from 22 million at the end of last year to more than 43 million in 2011, predicts researcher CCS Insight.
As we compare this subscriber growth with falling revenues, it appears that the real issue for the operator community isn’t competition from the Internet world, but overcrowding by low-spending customers. There may be billions of subscribers, but they are simply not using — and paying for — enough services to support every operator. The EU’s approval of the proposed merger between Orange and T-Mobile in the U.K., one of the most competitive mobile markets in the world, may be the start of…