Outlooks and aims have changed significantly for all the actors in the mobile phone market in Great-Britain since the communications act was passed. Indeed, this important step towards telecom market deregulation implied a severe toughening of the competition on the concerned markets. Several important events transformed the UK mobile market, such as arrival of new network providers, the country becoming one of the innovation leaders in this domain.

During our three month study,  we have tried to focus mainly on and to respond to questions which became essential as we got involved in the subject. For example, how do operators generate consumers’ desire ? Is the return on investment enough to generate new innovations ? What has made the arrival of virtual operators possible ? Which are the most satisfying providers, and on which basis ?

Over the years, Great-Britain has become Europe’s new pole of innovation in mobile activities. There are five main network operators, but new competition is growing. The arrival of MVNO’s on the market forces the providers to rethink their strategy.

MVNO’s almost only have to hire telephone lines to become established; this is why they represent a threat to Vodafone, O2, T-Mobile and Three. In reaction, T-mobile has decided to bargain with these new competitors to make up for the dropping market share.

Spawning consumers’ appetite for 3G technology is harder than one would have initially thought. Consumers don’t seem impatient to adopt this technology yet, despite for example the massive success of camera-embedded mobile phones. As a matter of fact, this success hides the fact that operators tried to trivialize this kind of product to justify the establishment of 3G networks. 2.5G is rather used as a temporary technology as it is more adapted to today’s consumers’ demand and operators’ costs.

Aware of the new markets’ trends, operators tend to adapt their strategies, for example by offering a “mixed-service”: mobile and fixed line telephony services. To deal with their competitors, providers try to keep their customers, but also to entice their competitors’ clientele. Moreover, customer and after-sales services have increasingly become determining, and both the operators and the retailers have discerned this alteration. Telephone operators made the mobile phone a fashion accessory via intense marketing, targeting mostly the younger generation.

Synthesis.doc

This chart sums up the best websites we have used during our study.

Best_Websites.xls

The UMTS or 3G environment is the ultimate convergence of fixed and mobile, voice and data, content and delivery. The result will be the largest and most complex communications system that man has designed. If you want a challenge then this is the industry to be in.

Creating_Killer_Applications_in_3G.doc

http://www.amazon.fr/exec/obidos/ASIN/0471485500/ref=si_2_14/171-9488326-2724247

UMTS as a technology allows for exciting new applications of some of the best ideas of services in the fixed telecoms, cellular/mobile telecoms, and internet environments, with many revolutionary new possibilities which simply do not exist in the current media and communications vehicles.The current worldwide interest in UMTS/3G is driven partly by the iminent roll-out of the new infrastructure during 2002/3.

Making_Money_from_3G_Services.doc

http://www.amazon.fr/exec/obidos/ASIN/0470847751/ref=si_1_4/171-9488326-2724247

This chart sums up the most relevant articles we have found during our research.

Chart__best_sources_1.xls

3G and its related modern services opportunity is a new game for mobile operators and presents challenges that the modern marketing staffs at mobile operators are not experienced in. No comprehensive book currently exists on how to market the new mobile services. As 3G networks come on line, and with ever increasing competitive pressures, a comprehensive marketing book focusing on mobile services is needed.

3_G_marketing.doc

http://www.amazon.co.uk/exec/obidos/ASIN/0470851007/ref=si_1_1/026-8863675-6408407

Summary of the eleven best sources

28 dec - Dosmetic Telecommunications Market Assessment 2005

Since 2003, the annual growth of the UK mobile phone market has been pretty slow, from £28.27 billion in 2003/2004 to £29.88 billion in 2005. It seems businesses are now ready to switch from fixed lines to mobile communication, like ordinary people. Vodafone, Orange and O2 are leaders on the England’s mobile market. 

26 dec - O2 study forecast

According to this study, the mobile industry contributes to around 2.2% of UK’s GDP, and this ratio is expected to rise to 2.5% by 2008, and up to 3% by 2013 (from £22 billion in 2003 to an expected £49.1 billion in 2013). This industry provides the British economy with 197,000 jobs in 2003 and should need 43,700 more jobs by 2008, and some 12,200 more by 2013. Productivity in this sector is very high, three times the national level, with an expected high growth for the years to come (reaching 7.5% per year).

21 dec - Evolution to 3G

2G was not enough to cope with the consumers’ new needs. Operators invested in “2.5G” because the expenses to develop 3G were too important, and because their former investments to establish 2G have not all paid off. Only 23 networks worldwide operate on 3G technology. This new technology will enable the operators differentiate themselves by providing services and offering content using these new fast data transfers.

15 dec - O2 Ranks Highest in Customer Satisfaction among Network-Owned Mobile
Phone Retailers

According to a survey interrogating consumers, O2 is the operator that provides the highest satisfaction level, T-Mobile, Orange and Vodafone are below, with about the same satisfaction level. Concerning the independent phones retailers, Phones4u is pointed out as the best, The Link comes second and The Carphone Warehouse last of the three (the evaluation factors being the staff, the offerings and promotions, and the store).

9 dec - Britain leads European mobile innovation

It seems that the epicenter of innovation in mobile activities has moved from continental Europe (mostly Scandinavian countries) to the UK, with the offering of virtual content like games, gambling, e-mailing… More than 200 wireless start-ups operate in the UK, with a combined turnover of £2 billion. The internationalization enabled mostly Vodafone, but also O2 and Orange to operate in other countries.

7 dec - 3 UK Bottoms on Customer Satisfaction Survey

39 million UK adults own a mobile phone, and spend on average $36.40 per month for it. Given the UK population, the market is almost saturated, and the competition is now about the churners rather than the new subscribers according to this report. The main challenge for the network operators is now retain their own customers, and to try to attract others from rival networks. That’s why customer service is very important, and most operators understood the situation and invested on this service, excepted 3, which has a high dissatisfaction rate. 

5 dec - UK, 15 Mobile Service Providers by Christmas 2006

Network operators have underestimated the threat of MVNO’s (mobile virtual network operators). Indeed, such companies can be set up in a matter of weeks without any important financial investments and so with little minimal takings to survive. That’s why many companies are willing to invest in this sector. For example, T-Mobile will let its network to MVNO’s. UK retail chains like ASDA or Tesco are some examples of would be MVNO’s.

4 dec - UK Mobile Consumer Trends

Even if many investments have been made in order to provide consumers with the 3G network, we can notice that people are not interested yet in the new services proposed by the operators. 15 million mobile lines are suscribed for business motives, instead of personal use. The growth of the number of lines is overestimated, because the high replacement rate of handsets comes with a new SIM card, and it takes time for the operators to update their suscribers’ base. The good sales of camera embedded mobile phones does not imply customers’ desire for sending photos via MMS (Multimedia Message Service), with a medium growth for this service. They are the results of operators’ strategy to encourage consumers to use 3G, and here to swamp the mobile market with such handsets. Video usage is still very limited, and the downloading of video/music is much below the operators’ expectations, leading to a poor investment return.

4 dec - Top 50 Companies in the UK Mobile Market

O2 published a report showing that UK is one of the leading countries in the mobile sector. They selected 50 British firms related to this industry, which represent £1 billion of combined revenues. This report highlights the dynamism of these UK firms, and the fact that mobile phones are a very exportable commodity, because it is estimated that 2 billion people own a mobile phone, and they want to replace it when it’s obsolete.

4 dec - Competition in the UK Telecommunications Marketplace

The UK government passed the “Communication Act” in July. What was previously a licence based system has now become a “general conditions of entitlement” regime. This represents a major deregulatory step, which in turn encourages a more competitive environment for telecommunications. Advertising made mobile become a fashion accessory, and customers want the latest model.

24 dec - Mobile Phones UK Industry

UK mobile phone market is maturing, and still growing. The industry receives its revenues from connection fees, monthly line-rental charges, call rates, and interconnection fees. New consumer tastes, phones with new features, deregulation in the operators’ market fuel the growth, which is unlikely to slow down with the mobile phones UK Telecom’s market increasingly integrating. Indeed, nowadays, a phone can be used as a camera, MP3 player, gaming platform… Cellular operators have a smaller customer base than fixed operators, and cannot offer the same rates because of their higher costs, but they are leaders in innovation and their technology is evolving faster. We will eventually face a convergence between fixed line and mobile phones operators, with some companies already offering a range of mixed services. Advertising made mobile become a fashion accessory, and customers want the latest model. Competition toughened UK mobile operators, enabling them to penetrate foreign markets. UK mobile phones market relies partly on foreign inward investments, which were lured in with tax breaks and direct subsidies. The mobile phones UK market revenues will increase not only through new customers but also from the absorption of fixed-line revenues as consumers migrate to cellular networks.

the_mobile_market_in_England_1.doc

This scheme represent the different type of key words we have used during our study in order to find information about the mobile market in England.

The_brain_map_1.doc

The aim of this paper is to estimate the importance of (induced) network effects in the use of mobile telephones and the impact of the structure of social networks on a consumer’s adoption decision. This is done using social network data obtained from a survey of second year undergraduate students at the University of Nottingham Business School. We find that students strongly coordinate their choice of mobile phone operators, but do this only for
operators which charge a price difference between on- and off-net calls. Coordination is strongest within groups of students who frequently interact with each other, but weaker with students from outside their group.
Furthermore, the students did not coordinate their choice of mobile handsets – there rather is a tendency to choose a different handset than the one used by their friends.

Social_networks_and_choice_of_mobile_phone_operator.pdf

http://www.nottingham.ac.uk/%7Elizecon/RePEc/pdf/networks.pdf