The report raises a great deal of questions:
- Are there more potential partners? Is the aim a single international infrastructure, or would there perhaps be multiple alliances of this sort? Vodafone would likely also participate, but Tele2 and Hutchison 3G probably not.
- Would national and regional players like KPN be excluded, limiting their economies of scale?
- Would it be just mobile or also fixed telecom?
- Would it first focus on national network sharing or is it about transnational agreements? If it's only national, then for example T-Mobile Netherlands would need to find a partner. Vodafone is a candidate, but does not yet have many network-sharing agreements (in the UK with Telefonica and Ireland with 3).Tele2 also has limited experience with network sharing.
- The aim of the cooperation does not seem to include international roaming. The EU already has a clear standpoint on this: the cost of roaming needs to fall over time to the same level as national services.
- (Trans)national network sharing. UK operator EE (Everything Everywhere, a joint venture between Deutsche Telekom and France Telecom) is a good example. The focus is on wholesale (although EE has recently launched on the retail market), and both the parent companies are considering listing EE on the stock market. US operator Cearwire is another example of a company based on around wholesale.
- (Inter)national mergers. The latest consolidation attempt in France, a merger of Free and SFR, was reportedly ruled out by the regulator before it was even notified.
What's most remarkable is perhaps that telcos again are moving further away from (passive) infrastructure and vertical integration and taking the next step towards structural separation of the network and services. This is already underway with sale-leaseback constructions for towers, network sharing and outsourcing (to Ericsson for example).
The necessity is clear, but the fact that operators are first consulting the regulators makes one wary. The world is changing and those that don't change with it won't survive. Adapt or die is the motto. However, preserving the dinosaurs cannot be ensured by relaxing regulation. The regulators are more concerned about maintaining healthy competition. They will focus on ensuring a fair wholesale market, with good prices, equality and transparency.
And if the telcos do adapt to the new order, then lower end-user prices must results, as prices will gravitate towards those offered by the OTT providers. And these are very low, if not free. Access prices (which are not transparent on their own) are another story. The operators will try to see these increased.
Whatever the case, a fundamental change in the environment is not immediately evident and could take years to realise. Mobile licences are valid for decades, there are still large differences in national markets, mergers do not occur from one day to the next, and multiple parties with varying interests are implicated.
