Tuesday, September 08, 2009

Why Orange/T-Mobile merger means less subscriber choice

The big news today is undoubtedly that of the merger between Orange and T-Mobile, to create the UK's biggest operator with 28.4 million subscribers. Of course, the companies are lauding it as bringing "substantial benefits to UK customers", but will it really?

Consider this. Vodafone and O2 have already announced a network sharing deal (essentially this means that they will consolidate 2G and 3G cellsites, but they'll keep their own Node Bs, RNCs etc.). T-Mobile is similarly already the host for '3' and for MVNOs such as Virgin Mobile.

So, merge Orange and T-Mobile and the subscriber really is down to a choice of just two networks.

Sure, they'll have their own OSS/BSS and equipment at the edge of the network, but if mobile is about anything, it's about the RAN. It's about coverage, quality of service and (call me old fashioned) being able to get a dial-tone and make a call. You can have all the choice of price plans and shiny devices in the world, but if you keep dropping a call, can't get coverage in your home, or have a painfully slow mobile data experience, what's the point? And if you can't switch network to one with better coverage, where's the consumer choice?

As we saw earlier this year from OFCOM's coverage map, 3G coverage remains far from nationwide. Merging Orange and T-Mobile may save over £3.5 billion "over time" (a helpful comment that gives no indication of timescale), but will these savings be invested in extending mobile broadband coverage?

The simple situation seems to be that while UK subscribers may have lots of brand choice in terms of which operator they choose, ultimately they will have the choice of only two networks.

Doesn't this sound like something that should excite OFCOM?

No comments: