Livewire

Being a pure play mobile operator in western markets seems to be getting harder each day. They already have to deal with considerable market penetration which impacts future growth, but now a few more pieces of news will further complicate matters. First, a new study by Multimedia Intelligence noted the teen market, a growth segment and consumer of data services, is nearing saturation in the US. Considering this is not a multiple handset customer segment, this is not good news for the operators. Second, Tariff Consultancy has a new report detailing the worldwide trend for unlimited bundles for voice and texts. These unlimited plans simply beg for cost undercutting and further put pressure on data services to make up the revenue. My last point has more implication for European operators where the EU regulator wants international roaming charges greatly reduced, currently a good revenue stream for the mobile operators. Saturated markets, supersized bundles and cheap roaming, not a good state of affairs.

All is not lost however, the forward looking operators are already tapping into emerging markets in the east (Vodafone), using new handsets to drive demand (ATT iPhone), consolidating competition (Verizon/Alltel), bundling landline (T-Mobile) or simply looking to drive new data services revenues with a portfolio approach. Pressure on the mobile operators is nothing new, what is the correct strategy? I welcome your comments.