According to the Spanish communications regulator, three firms--Telefonica, Orange and Vodafone-- have 75 percent marke share. That is not at all an unusual market structure for a mature industry. “A stable competitive market never has more than three significant competitors, the largest of which has no more than four times the market share of the smallest,” BCG founder Bruce Henderson said in 1976.
Codified as the rule of three, the observations explains the stable competitive market structure that develops over time, in many industries.
The rule of four is related to the rule of three. It refers to the expected market share in a stable market, where leader market share is twice that of provider number two, and where the number-two supplier has share double that of the number-three provider.
That creates a stable market share structure of 4:2:1. It arguably is stable because there is little incentive for either number one or number two to disrupt the market by attacking to gain share.
The point is that stable competitive markets often have a handful of firms--three, typically--having 70 percent to 80 percent market share or installed base. The Spanish market structure is quirte common for mobile communications.
In most mobile markets, the classic structure is not fully seen, suggesting that some share shifts remain quite possible.
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