Mobile Network Comparison

BT is set to become an even more dominant player in the fixed-line phones, broadband, mobile and TV market. The proposed merger of two of the UK’s largest telecommunications companies in a £12.5bn deal which sees the BT Group in a takeover of mobile phone network EE, has been given provisional clearance by the CMA, the competition watchdog.

The Competition and Markets Authority said the deal, agreed in February, was “not expected to result in a substantial lessening of competition” and did not propose any changes in the terms of the deal.

“The group does not provisionally believe that, in a dynamic and evolving sector, it is more likely than not that BT/EE will be able to use its position to damage competition or the interests of consumers,” John Wooton, chair of the CMA inquiry, said.

The CMA said the two firms operated largely in separate areas “with BT strong in supplying fixed communications services (voice, broadband and pay TV), EE strong in supplying mobile communications services, and limited overlap between them in both categories of service”.

BT chief executive Gavin Patterson said: “The combined BT and EE will be good for the UK, providing investment and ensuring consumers and businesses can benefit from further innovation in a highly competitive market”.

The market response to the announcement was immediate as shares in BT rose 4% to 470p within hours of the announcement.Telecoms giant BT announced in February that it had agreed to acquire EE with the deal expected to be completed next March.

The takeover more than trebles BT’s retail customers adding the 10 million it already had to EE’s 24.5 million direct mobile subscribers. BT has a tight hold on broadband services in the UK, being both the most significant provider of broadband services as well as the owner of most of the broadband infrastructure in the UK through its Openreach division. It also provides the capacity to mobile operators to transfer data from phone masts to other networks.

Openreach is still an ongoing concern for BT’s competitors. They would have preferred to see Openreach removed from BT so that it could operate completely independently. This matter is currently being reviewed by UK regulator Ofcom.

The deal would allow BT to offer customers so-called quad-play packages of TV, fixed-line phone, broadband and mobile, which competitors like Virgin Media and TalkTalk already do. The approval, albeit provisional, is expected to anger competitors who see the deal allowing for the creation of a dominant player across all telecoms sectors.

Through this huge takeover, BT is acknowledging the rapid growth of mobile connectivity and the inevitability of a convergence of fixed-line and mobile broadband. The likely scenario in a few years would be that customers would subscribe to a single data connectivity package which would give them access to communication channels inside and outside their homes through a combination of wired broadband, WiFi and 4G (or 5G?).

In reality, we’d argue that BT had no choice but to do this deal to secure its own future viability.

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Hutchinson Whampoa has been in talks to buy O₂ for the last few weeks. It has been said by industry experts that the asking price is going to be about £9 billion. Some insiders have expressed surprise at the fact the smallest network in the UK is going to buy O₂ who were whether pioneers of mobile telephony since its inception.

However, Telefonica – the owners of O₂, are laden with outrageous amounts of debt and recently have been struggling as they are increasingly-desperate to raise some liquid funds. O₂ currently has about twenty three million customers and the deal, if and when it’s completed, would be the largest consolidation merger in europe.

It has being an open secret in the industry that Telefonica have been trying to sell the UK branch of O₂. The deal makes even more sense as it would give Three a much needed 2G capacity and also combine both networks’ 800 2 has traditionally struggled with having the capable and widespread 3G and 4G network and by combining his resources with Three hopefully will be up to provide this in the future.

Recently, there’s also been another massive acquisition in the mobile network market in the UK. The country’s biggest mobile operator, EE, is going to be purchased by BT in a £12.5 billion deal. This additional pressure on their rivals has probably led to this merger as it will be beneficial and allow better competition with the new mega network that would be formed. Indeed, analysts find it completely unsurprising in light of the new BT/EE partnership which would hold a combined share of over a third of the consumer mobile market.

There are risks that consolidating the amount of options available to the general public will result in decreased competition and as a result prices could rise. Additionally, Hutchison Whampoa owner Li Ka-Shing has a personal wealth of over £25 billion as well as a humongous property empire – it remains to be seen how committed he is to providing a quality service rather than simply making a return on his investments. It’s easy to argue that fewer players in the telecoms market is unlikely to be a positive development for consumers.

However, the poor quality and speed of O₂‘s data network has been a bane for users for several years now. In comparison, Three has one of the best mobile data services available and also is much more generous with its bandwidth allowances.

Currently, Three only has a few very small virtual networks hosted such as Shebang and VWF. In comparison, O₂ provides infrastructure for large offering such as Giffgaff, Tesco, Lyca and GT Mobile so the increase in MVNOs under the Three umbrella could be a positive development for their users. Having said that, it remains to be seen whether Three will have the same opinions about these virtual networks especially seeing as Giffgaff alone has trading losses of about £70 million since its inception (although it has become more profitable in recent trading years).

The deal has only been confirmed recently (subject to standard due diligence processes), but it has been announced that the total payment will be over £10 billion including initial an initial injection of more than £9 billion in liquid cash. Once finalised, the merger will create the UK’s biggest mobile network with almost 50% share of the market. At the moment, it doesn’t seem like there’s any resistance from the regulator, so it’s very likely that it will eventually go through.

So O₂ have finally been bought out after finding a serious buyer. What’s your thoughts on the merger? Are you a customer of Three or O₂? What is in the future is for existing customers of both networks and do you think you’ll be a positive or negative outcome? Please let us know your thoughts and the comments below 🙂

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EE, the UK’s first network to launch 4G superfast services, has announced that they will soon be able to substantially increase the bandwidth available to their customers. They are set to flip the proverbial switch sometime this summer which will massively increase the potential internet speed. The theoretical throughput is in the region of 130 Mbps but in-field tests will probably be able to produce download speeds around 80 Mbps. This is at least a doubling of the current 4G speeds available to UK consumers.

The roll out will initially only happen in ten major cities in Great Britain. The regions to first get the speed upgrade will be Birmingham, Bristol, Cardiff, Edinburgh, Glasgow, Leeds, Liverpool, London, Manchester and Sheffield.

Compared to typical home broadband speeds, the available bandwidth through 4G is massive. If the connections can prove to be reliable and prices drastically fall, mobile internet may soon be a viable alternative to home wired broadband before fibre optic data connections become more popular.

In fact, the 4G speeds EE are set to unleash will be amongst the fastest available anywhere in Europe. Currently Scandinavia leads the way with typical mobile broadband speeds reaching over 20 Mbps. After the change has been made and the dial spun all the way up, mobile data speeds in the UK are promised to be getting closer to those available in pioneering regions such as South Korea and elsewhere in Asia. Currently some of the fastest mobile data connections can be made us of in Japan where speeds in Tokyo can reach about 75 Mbps. Australia is set to get a 4G network capable of speeds up to 150 Mbps when Vodafone finishes testing its new infrastructure in a couple of months.

However, theoretical speeds don’t necessarily mean anything. The way mobile internet works is that the available bandwidth is often shared between several users. This number is known as a contention ratio and means that the real-world results are frequently less awe-inspiring. In the US, 4G speeds are often found to be about 10x slower than potentially possible.

Even so, the upgrade is certainly welcome. And if we do get speeds approaching 80 Mbps it will surely mean that there will be more and more exciting things we can with our mobiles. This amount of bandwidth would help unleash a new range of stunning apps for use when out and about. For example, it should be easily possible to send and receive ultra-crisp HD video in real time between users. This could provide massive benefits in all sort of applications for example in medicine when used by paramedics.

EE recently acquired a large amount more radio spectrum to use for mobile internet in the much-delayed Ofcom auction. It now owns over a third of all the mobile spectrum in the UK and aims to further increase the speed available to its users later on. In fact, the 4G service could soon be reaching speeds of up to 300 Mbps.

However, the problem with the ability to get such fast mobile connections is the price consumers have to pay. EE have already come under fire for overcharging when their 4G plans were first announced. The network had a practical monopoly and asked for a premium price when it launched its 4G service. Here at Mobile Network Comparison, we’ve also been very critical of the tight data limits EE have imposed on their super fast plans. If you can get the speeds they advertise on your phone, it’s very possible to unknowingly blow through your entire monthly allowance in a matter of minutes. More data on 4G plans ends up costing a lot more money.

Because of these high prices, take up of EE’s 4G service hasn’t been as good as expected. In fact, less than 10% of subscribers have taken on the more expensive plans. We suspect that most consumers will be more looking forward to affordable 4G plans for all before they are desperately keen for more and more speed. This is especially true as HD video calls between mobiles will require both users to be able to get high speed connections. And until unlimited mobile data plans are more commonplace, speed isn’t really the biggest issue. If you have a 3GB limit each month, that still the hard limit that affects you most regardless of whether you can use it up at 300 Mbps or 10 Mbps.

What do you think? Are you desperate to get your hands on a 80 Mbps internet connection in your pocket? What do you think you would use these speeds for? And do you think current 4G pricing is fair to customers?

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