According to John Delaney in London, an analyst for the International Data Corporation, “You are going to see this happen more and more. Fundamentally, there are too many network operators. Revenues are declining in the core services of voice and text, and the rise in data revenue is not making up for the shortfall.”
Policy makers are encouraging the merging of phone companies in hopes that like its competitors in the United States and Asia, the consolidation of companies will allow for quicker access to new technologies. Merging would also increase customer bases and revenues. Operators could potentially save millions using their vast wireless grids, and by utilizing LTE, Long Term Evolution, technology.
The European commissioner for telecommunications, Neelie Kroes said “Having a few pan-European operators that are strong in the cross-border market would not necessarily be bad for competition.” But some companies are not too keen about the idea.
Vodafone and a unit of Telefonica of Spain, O2 U.K. in Britain, have agreed to join their network of grids, and this expansion should save on their operating costs. Although the companies have not consented to the consolidation of their businesses, their agreement to share grids reduces the need for expanding LTE networks on their own. Other companies are expected to follow suit.
In 2010 the merging of T-Mobile, Orange, and the British mobile units of France, Telecom and Deutsch Telekom, into Everything Everywhere is more than likely the culprit behind the recent consolidation trend. Everything Everywhere is now the largest mobile operator in Britain, and competitors are trying to imitate what has made them so successful.
Everything Everywhere emerged in Europe’s most competitive market with five network operators. O2 U.K. found success by selling data and custom caller plans. Along with their texting and messaging allowances, O2 U.K. also got exclusive rights to sell the iPhone in Britain from 2007 to 2009.
Meanwhile, mobile operators in Germany are looking into a possible merging opportunities and different sales options that have the potential to put them on top. O2 Germany, another unit of Telefonica, and E-Plus of KPN in the Netherlands, have been trying for years to catch up with their competitors, but have yet to create a monumental step up.
Everything Everywhere’s profitability rate, however, has slowed a bit. Since the end of 2011, its shares have declined from 37 percent to 33.7 percent. This could be due to the company’s uncertain strategy when it comes to choosing its brand identity, as they are operating under Orange brand, T-Mobile brand and Everything Everywhere.
After the company let go of 16 of its executives in September 2011, the company has improved it profits. Though the company’s shares have taken a beating, the revenue from data and messaging plans went up by 17 percent in the first quarter of 2012.
Deutsche Telekom and France Telecom are satisfied with the state of things, and according to Deutsche Telekom board member for Europe and technology Claudia Nemat, “Everything Everywhere has established itself as a market leader in the British market and is successful in a rapidly changing telecommunications industry and within the current difficult economic climate.”
This article was written by Phillip Presley he is interested in computer science and new technologies. He recommends that all companies consider integrating new Remote Desktop Software technologies into their business.
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