Several European mobile companies revealed earlier today that they’re not exactly keen on Google and Apple’s duopoly in the smartphone market. Subsequently, they have sworn to “break the monopolies,” and have asked market regulators to allow consolidation among competitors.
It’s no secret that there’s an economic recession. It may not be as obvious, however, that industry costs are rising significantly. Mobile operators, at least in European countries, are having a hard time keeping up with the subsidized handset costs. Every time a company sells an expensive handset at a subsidized price, they take a modest hit financially for each unit. These operators aim to lessen competition in the business by consolidating to two or three competitors per country.
Vodafone, Telef³nica and Telecom Italia are calling for various changes to help improve their own standing in the European market. They essentially want to reduce everything down to a single market, with lower taxes and enduring spectrum licenses to keep utility costs more reasonable.
Cesar Alierta, Telef³nica Chief Executive clearly voiced his opinion on the matter.
“This is not a level playing field. It is not sustainable that we invest more in handset purchases than in the development of networks.”
Alierta also said that, despite a total investment of European telecom companies in the billions (€225bn or £197bn) over the past five years, there’s been little to no return. Telecom companies seem to think this has a lot to do with Google and Apple’s combined stranglehold over the mobile industry.
Naturally, in response they’ve taken to supporting a relatively unproven player, Mozilla’s Firefox OS. The Firefox mobile OS has yet to see a commercial release.
The central theme for the upcoming Firefox OS is freedom. Apps for the platform will be offered directly through a standard internet storefront, instead of a proprietary app store. This will essentially offer complete flexibility both for consumers and developers alike. Alierta genuinely thinks the new Firefox OS is the key to most of European industry’s problems, and it will be particularly evident when the platform is finally available in the spring.
“This internet is dominated by a small number of players that restrict customers’ choice. We support open ecosystems to break monopolies and give greater choice and flexibility to consumers. Firefox represents a way to bring balance back to the sector.”
Franco Bernabe, CEO of Telecom Italia seems to think that many European telecom operators need help from business regulators, especially when they choose to invest in new technologies like 4G. It seems what they’re actually looking for is guaranteed success in the market, which is a tad silly considering the current state of the economy. There are no guarantees of any sort during a recession.
“Mobile operators in most markets are suffering from too much competition. Regulators should adopt a light touch approach and allow the industry to reorganise itself in order to cope … And governments should avoid imposing burdens on the industry in the form of taxation and spectrum charges.”
It sure seems like a random collective of mumbo jumbo when you just look at the surface issues. To break it down, these European telecom companies are worried that Google and Apple have a withstanding monopoly on the mobile industry. I would assume they’re directly referring to the proprietary mobile app markets run by each company.
As for the consolidation requests, the telecom operators just want a system introduced that will allow them to band together, ultimately strengthening their success in the European mobile industry.
It just sounds like an awful lot of whining to me. What do you think?