Archive for the ‘networks’ Category
Vodafone confirms rolling-out Voice over LTE and Wi-Fi Calling services in the UK this summertime.
We’ve recently heard about a lot of changes on the mobile market in the UK. EE is being sold to BT, Three is trying to acquire O2, Orange and T-Mobile have been phased out and we will not see any new SIM cards with their logos, but there hasn’t been much talk about Vodafone. But this British multinational telecommunications provider has not been sleeping and just recently has announced two big innovations that will be introduced this summer: Voice over LTE and Wi-Fi calling.
The first of the new services known as VoLTE (short for Voice over LTE) is simply saying using the 4G network to carry calls. What this means to a customer? Frankly, it won’t make such a big difference from day 1 and there seem to be more advantage for the operator than the customer. From the operator’s point of view, they may start phasing out 2G network and make their infrastructure simpler, which means lower costs. Customers will experience a better voice quality as the compression method used will be more advanced that will be reflected on clearer phone call than we are used to. Additionally, this technology also allows providers to setup the call faster than using 2G. The difference should be quite noticeable, so you might not have to wait so long before hearing the signal. The downside is that not every phone will support VoLTE. If you don’t have one of the latest smartphones like Samsung Galaxy S6, iPhone 6 or Lumia 640, the chances are Voice over LTE won’t work for you.
The second novelty at Vodafone is so called Wi-Fi Calling. This service will use available Wi-Fi connection to provide mobile coverage. Additionally, this will be done seamlessly without any need of additional apps. Customers who currently live in places with low mobile coverage or experience poor signal indoors will definitely welcome such an innovation. We don’t know yet whether this service will be provided for free and whether Wi-Fi calls will have sufficient quality to compete with standard signal. Nevertheless, Vodafone UK CEO, Jeroen Hoencamp, said: “It is another important step towards our commitment to build the UK’s strongest converged network.”
Both of the services have been tested in Vodafone’s labs and will be undergoing heavy trials, so that everything works as smoothly as possible during the launch this summer season.
EE announced that as of February 2, 2015, it stops selling Orange and T-Mobile plans and it won’t produce anymore PAYG SIM cards of these two brands.
It was believed that as a result of the deal with BT, EE will have to scrap their old brands, T-Mobile and Orange, by the time the operator is sold. Shortly after official announcement about the takeover, EE informed customers that their legacy brands are being phased out.
What it means is that since February 2 customers have not been able to get a monthly plan from direct sales channels like EE shops, while indirect channels offer T-Mobile and Orange contracts till the beginning of March. In terms of PAYG SIM cards, the published information says that EE has already stopped issuing new pay as you go SIM cards and all of these available in shops will become obsolete if not activated within a year. It is the last call if you want to become customer of any of the brands.
There are about 19 million customers in T-Mobile and Orange and the change will also affect them. They don’t need to sign a new contract straight away, but when the current one expires there will be no possibility to prolong it. EE has been actively promoting their 4G brand among that 19 million customers and it is said that already most of them are receiving exclusive deals to transfer their mobile services to EE. If you are a T-Mobile or Orange PAYG SIM card customer then it seems that EE will not force you to change the network but it hopes that the switchover will happen naturally as current T-Mobile and Orange pay as you go tariffs will not be updated so customers will eventually move to a network with better rates. It is still unknown how EE will try to attract their legacy brands’ PAYG SIM card customers to their 4G network.
EE explains the introduction of this idea by quoting their newest data which says that more than 90% of their new and upgrading customers choose EE over T-Mobile or Orange. As a result it won’t cause an upheaval if the brands are phased out as customers naturally go to EE. The 4G operator hopes to convert all T-Mobile and Orange customers to their 4G brand in the upcoming future and as so many people choose EE vast majority of customers will not feel forced to choose the new brand over the legacy ones. However, it is clear that EE did not expect such turn of events as last May its CEO stated that the T-Mobile and Orange brands “will stay for years” before finally phased out.
The ethnic MVNO looks into 4G as many of the MVNO’s customers select 4G services
In an interview with Mobile, Lycamobile’s CEO Chris Tooley stated that his company is disproving the belief that MVNOs can’t get access to 4G as Lyca’s customers showed that even MVNO consumers are eager to try out 4G services. This ethnic MVNO mostly known for providing PAYG SIM cards with very good international rates has entered the 4G market. The operator has been offering new bundled offers as well as state of the art 4G services and believes that 2015 is all about data and multiplay services.
Chris Tooley underlined that the company has seen an increase in the amount of data services sold while their text and call time revenues remained the same. Their strategy is to make customers use Lycamobile contracts or PAYG SIM cards as their primary or only mobile services. Currently, it is often the case that consumers use Lyca just for international calls and they change the SIM cards or phones for domestic usage. Lyca’s CEO explained that “by offering services such as 4G we’re more likely to encourage customers to use Lycamobile as their sole provider”.
The buzzword of this year in telecommunications services is quadplay. Many operators strive to offer their customers all modern telecoms services in one package: landline, mobile, Internet and TV services. Lycamobile has no infrastructure to provide all of these services but its CEO does not exclude a possibility that one day Lyca will be a player on the quadplay market. Nevertheless, this MVNO has a history of offering non-mobile services like their Lycamoney or Lycafly. Definitely, if the company ventures into different markets we might see services that will be catered for some ethnic minorities or immigrant workers rather than for example, a direct competition for BT or Sky in terms of TV.
We would like to see how a development of a classic ethnic MVNO into a diversified service provider will affect the company and their customers.
Hutchison Whampoa, owner of Three UK, confirmed that it is negotiating terms of acquiring O2 UK for over £9 billion.
Beginning of this year showed that 2015 might very likely be the year of consolidation. First it was BT that announced its desire to come into the mobile market through an acquisition of one of the main players. BT was supposedly in talks with both O2 and EE but shortly afterwards O2 was not longer in their scope of interest and currently BT is continuing its negotiations with EE which may likely end up positively. A couple of days later, it turned out that Hutchison Whampoa, mother-company of Three UK, also wants to invest their money in a potential huge buyout. Naturally, the operator they approached was O2. This was officially confirmed by the multinational telecoms corporation a few days ago and the proposed deal is estimated at £9.25 billion.
BT’s plans to merge with EE is considered to be a natural move for a company that wants to offer quadplay and from the point of view of customers and regulatory bodies it shouldn’t pose any risks or worries. This isn’t the case for Hutchison-O2 deal. Mainly it is due to the fact that this will effectively reduce the four main providers balance and leave only three major operators in play. We have seen the results of this in other European markets. For example, after Three purchased Orange in Austria that highly competitive market became less competitive and prices of some contract plans even went up. This may not happen in the UK but we would definitely see the price war slow down considerably.
Most experts believe that the BT-EE deal will not have any problems with being granted approval by Ofcom and the European Commission; however this may not be the same for Three’s potential deal with O2. First of all, we heard Ofcom stating that the four operators’ status quo in the UK seems to be the best solution for the market. Second, the final decision has to be made by EC which usually looks deeply into such market changes and most likely would accept the deal only after securing much advantage for other players in the market. But Hutchison has already successfully dealt with the EC several times. For example, it bought O2 Ireland for around £600 million last year so regulatory bodies are not an obstacle that cannot be overcome.
Should the deal come through, Hutchison Whampoa would amass customer base in the UK of roughly 34 million, which would effectively make it the biggest British operator with around 41% of the market. There is also the case of O2’s brand which is more recognizable than Three’s and has deeper roots in the British society. In the Republic of Ireland, both O2’s and Three’s brands are still in operation but O2’s sports sponsorships are being taken over by Three which might signify that the O2 brand will sooner or later disappear from the Emerald Island. Time will tell if O2 UK shares the same fate.
British providers have introduced above average price hikes for landline rental
Since the mobile phone become affordable and economic, landlines have seen a gradual decrease in popularity. People tend to move from fixed lines to using either postpaid or PAYG SIM cards. However, there are still a substantial number of landlines operating on the market and this amount is not decreasing rapidly.
BT, Sky, TalkTalk and Virgin Media have all been regularly increasing the cost of line rental. Since 2008, this price has changed by around 45% up to 64%. If we consider that the standard inflation-based increase would change the fixed line cost by only 20.5%, we see that operators have been introducing above-inflation rises quite often. From December this year, most major landline providers introduced a price hike of between 75p to 1 quid a month, which equals to roughly 5-6% increase, while others announce similar changes in early 2015.
One may ask why people with landlines haven’t chosen to move to PAYG SIM cards or any other mobile telecommunications in order to avoid such increases. The answer is that for some landline is still indispensable, but for the majority it is a requirement for their broadband. This way operators leave consumer little choice and people have to agree to landline rental fees.
Consumers who are not happy with recent price hikes at BT, Sky, TalkTalk or Virgin Media can switch their operator penalty-free. This is possible thanks to a new rule introduced by Ofcom which says that customers facing mid-contract price hikes are allowed to switch their operator within 30 days of being notified. If none of the available offers look attractive, you can try to save money by taking extreme steps and using PAYG SIM cards to connect to the Internet. This makes sense only when your data usage is not high and you live within 4G mobile coverage, otherwise your Internet speed may leave much to be desired.
Owners of EE and O2 are considering their options as both BT and Three UK are interested in buying them out
Last week rumours about talks between operators were confirmed. Both O2 and EE were approached by BT representatives as it seems that the British telecommunications company wants to come back to the mobile market. Analysts estimate that EE is the largest network in the UK with one-third of the market in their hands, while O2 is just behind it with a quarter of the market. The potential value of these main operators is £10bn and £9bn respectively. EE is owned by Deutsche Telekom and Orange and these two shareholders were looking into many options, however, this is the first time that a possible sale is seriously considered. The other operator, who is up for grabs, is O2. If BT bought it, then the history would make a circle as O2 was originally cut out of BT Group in 2001 which was then operating in the red. A few years later it was bought by French Telefonica. There has not been any official statement released by BT so what we know is that both main operators have talked with BT but they are probably secretly negotiating.
But the situation got a bit more complicated as Hutchison Whampoa, Three UK’s parent company, also got interested into expanding their market share by acquiring either O2 or EE. This Chinese multinational company has been recently spending a lot of money on buy-outs and merger. For example, this year it has bought O2 Ireland. With two potential buyers it seems that we might soon see a big change on the telecoms market
Obviously the talks are in preliminary stages and such a big acquisition had to be approved by Ofcom. The watchdog once stated that having four main operators creates a healthy market in the UK. This means that Hutchison Whampoa may have to worry about whether it would be allowed to conclude such a purchase. On the other hand, BT’s return to the market would definitely create a new powerful competition on the market but would not disturb the balance and we would still have four independent operators.
5.6 million customers was enough for EE to be named the largest 4G mobile operator in this part of the world.
British joint-operation of two multinational mobile operators, EE has amassed enough customers to be the biggest 4G network in the Old World. This fact surfaced as the provider disclosed its Q3 report in which they admitted to adding 1.4 million 4G customers in the last three months. As a result, the total number of both 4G PAYG SIM cards and post-paid ones at EE is 5.6 million, making the operator the largest 4G network in Europe. This is unprecedented growth as their 4G customer base increased fourfold during one year.
EE’s Q3 results also showed that it gained a significant amount of contract customers, while their PAYG SIM card customer base shrank by 11% year-on-year. Additionally, EE boasts having signed up another 700 corporate customers that use 4G. The trends also show that more than 80% of new customers choose a 4G tariff. It is definitely to a large extent due to EE’s mobile coverage that now reaches to more than 48 million people that live in 281 towns and cities and more than 2,500 villages and small towns.
Even though EE has been growing its customer base, the financial results are rather stagnant. The operating revenue did not change a lot year on year as it went down by 1.2% from 1.54 billion pounds to 1.52. However, if we don’t take into consideration regulatory costs, their revenue was stable at 0% year-on-year.
The company wants to build on current results and see their future in revenues from data and providing customers with new double speed 4G. Additionally, they want to expand their range of services, for example, by adding EE TV, which is a TV smart box for freeview channels and on-demand video.
British operators want the government’s help in order to expand mobile coverage to all of the UK.
Even though, we have been implementing 4G network quite fast, there are still a lot of British homes that can’t get a 3G mobile signal! To be more precisely the problem of having no 3G mobile coverage still affects around 6.1% of UK homes. The government strives to resolve the problem of black spots by launching the mobile infrastructure project that promised to bring mobile coverage to the whole country by March 2015. However, they have already postponed the deadline by a year.
Mobile Operators Association (MOA) revealed that British mobile providers will not reach 100% mobile coverage if the government does not somehow subsidize this idea. The operators said that they invest significantly more money into rural infrastructure to provide coverage to few people and this is unprofitable. MOA’s Director said that even though main operators share their networks to reduce costs, Vodafone works with O2 while EE collaborates with Three, they invest more per capita in rural areas than in urban ones. Right now, mobile providers heavily develop their 4G mobile coverage which will support government’s goal of providing superfast broadband to all UK homes and business by 2017.
MOA proposes some changes to Electronic Communications Code which would pull down some barriers that right now restrict operators’ business. The Department of Culture, Media and Sport is open to debate to find a consensus that will satisfy both parties and let the project move forward. Recently, there were rumours about the idea of introducing national roaming, so that operators would share masts to increase their mobile coverage and hopefully remove some black spots.
Ofcom decided to punish Three UK for not complying with rules on handling complaints.
The British telecoms watchdog launched a monitoring and enforcement programme some time ago. Ofcom’s initiative’s goal is to watch over how customer complaints are being dealt by operators. Recently, we have learned that they had their first success after investigating Three UK.
The regulator found some issues in Three’s complaint handling processes. As it turned out some complaints weren’t resolved in a fair and timely manner. The main offence was that some customer cases were closed even though they weren’t properly dealt with. Other problems involved situations when customer calls were not registered in the system and as a result they weren’t treated according to the operator’s complaint handling process. Ofcom was also dissatisfied that Three’s customers weren’t aware that they could try to fight for their rights through alternative dispute resolution (ADR). Three UK is obliged by the law to inform their customers that such scheme as ADR exists. Alternative dispute resolution is part of consumer protection policy and it is a free-of-charge method of referring a complaint that couldn’t be resolved to an independent body that could give an objective ruling.
Ofcom decided to fine Three UK £250,000 for non-compliance with approved Code of Practice for complaints handling. The watchdog also acknowledges that Three UK ensured that its complaint handling process will be in line with the legal requirements.
Claudio Pollack, Ofcom’s Consumer and Content Group Director, commented on this situation saying “When things go wrong, customers are not only entitled to complain to their provider, but must have confidence that their complaint will be dealt with fairly.That’s why we impose strict rules on providers on how they must handle complaints.We treat any failure to follow these rules very seriously”.
Some British operators informed that if Scotland votes for independence this week, Scots may end up paying more for telecommunication services.
The operators that penned the letter, i.e. BT, TalkTalk, O2, Vodafone, EE and Three UK, assured their customers that the results of the Scottish independence referendum won’t affect the continuity of the business and telecoms service will continue to be provided. This commitment, however, doesn’t mean that the current status quo will be kept. Mobile providers expressed their concerns related to how the industry would be regulated if Scots vote “Yes” this Thursday. Such factors as mobile spectrum or EU regulatory framework were listed as potential problematic issues.
The letter looks like a short warning that if Scotland became independent, there are so many unknowns that those operators may have to modify their service. Presumably they would have to increase their PAYG and PAYM tariffs to break even. The letter signatories backed their concerns by saying that Scotland has “demanding topography and relatively low population density” and apparently this may lead to higher “industry costs”.
Nevertheless, British operators don’t want to get involved in politics and they “pledged” that they would try to do their best to keep on providing their services in independent Scotland and stay committed to their customers and employees.
The upcoming referendum may mean a lot of changes for the British society and as telecommunication services are integral part of it, they wouldn’t be unaffected. For operators, independent Scotland would be a new market to compete for and as usual in such cases the consumers should benefit the most from it.