Thursday, January 28, 2016

Iliad Ponders U.K. Mobile Market Entry

Iliad’s Free Mobile, eyeing asset disposals a Three UK and O2 merger would entail, is considering entering the U.K. mobile market.

European Union regulators will give the proposed merger close scrutiny, as the merger would reduce the number of facilities-based national mobile providers from four to three.

That is a key reduction, as many observers and regulators think four is the minimum number of contestants to promote robust competition. An entry by Iliad might, some could argue, immediately bring the number of leading providers back up to four.

Others might argue the U.K. market already has Virgin Mobile and other mobile virtual network operators, with future entry by Liberty Global a virtual certainty. Sky might be interested in any divested transmission and customer assets as well.

Ironically, no matter what regulators or incumbents seem to desire, new competitors seem able to enter mobile and Internet access markets rather frequently, despite the high barriers to entry that many would say exist.

In India, Reliance Jio has triggered a massive restructuring wave.

In the U.S. Internet service provider market, Google Fiber and scores of independent ISPs are building gigabit Internet access networks in markets dominated nearly completely by cable TV and telco ISP operations.

In the U.S. mobile market, where regulators nixed a merger of number three and number four mobile providers (Sprint and T-Mobile), Comcast is preparing its own entry into the market, while Dish Network has amassed serious spectrum assets (either to entry as a retailer or to sell its assets), while additional contestants such as LIghtSquared and Globalstar also want to get into the mobile business in some way.

One might well argue that no matter what service providers and regulators might prefer, reducing the number of leading providers in mobile or Internet access markets is proving to be ephemeral.

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