Ofcom report: Mobile operators feel the squeeze

Pay to play

The operators only have themselves to blame. The bids in the the UK for 3G spectrum in 2000 were insane as it was clear then that wifi would affect price and service expectations. In most other European countries with similar bidding procedures (Germany and the Netherlands spring to mind) this led to rapid consolidation in the market and a drop in the number of operators. The losses incurred by writing off the investment showing up in the government's books as reduced tax take. Only now is the UK seeing parts of this with the T-Mobile/Orange tie up.

Regarding the figures - revenue is not profit. Google is likely to be turning a profit on those ads but as far we know Facebook is still burning venture capital. In any case the operators know exactly what is going on their networks and they are in a position to make the services "pay to play" to get access to the ad revenue or even substitute it for their own - everything goes through their proxies after all.

As for pre-paid versus post-paid - both forms are legal contracts. Arguably pre-paid is better for establishing a fair price for bandwidth - the service stops working when you run out of credit so there is a real incentive to top-up to continue to chatter. But that isn't the real battle. As you point out the cost of customer acquisition and handset subsidies are painful front-loaded costs that the industry needs to wean people off - Andrew Orlowski pointed this out years ago. But if the industry continues pass on the real costs* of providing the service to consumers then it has only itself to blame.

* The apparent costs in the UK continue to be significantly ahead of those in comparable economies such as Germany where the operators are making money, cf. Deutsch Telekom's most recent results which were buoyed by revenues in Germany for data services.

What data service?

Geography and population concentration means that they have a lot of customers for data services, but they're not where I am. There's voice coverage on the local motorway (I wasn't driving at the time), but data keeps dropping out.

So I really don't have much use for mobile.

Quit whining

I sent a friend in the UK a text. I'm on a contract. €0,28. Which by my calculation makes it about €750K per megabyte. A real money spinner, that.

I pay for an amount of data. A service. That is what they are to me. Like my broadband provider, I stuff data in, and I pull data out.

Perhaps if they wish to reduce the amount of data on their network, they might consider pulling their fingers out and adding blacklists/whitelists to Android. I'm sure a fair few people wouldn't miss the advertising - which is frequently the slowest thing to arrive, especially for those on EDGE. But no, that would mean implementing firmware revisions. Apparently Android 2.2 is available for the Defy. Not with Orange it isn't. I guess they figure I've got my phone, tweaking it now won't make them money...

Swings and roundabouts, sure, but things I'll keep in mind at contract renewal time.

Meta-question

It seems fairly universally the case that Reg readers are not buying what the mobile industry is selling, here, so why exactly does El Reg continue to pay Bill Ray to act as a barely-disguised-at-all mouthpiece for the mobile industry, when all you're doing is damaging your credibility with your readers?

Title

Well in the states the same can't be cried about as the government on alot of levels subsidizes communications.

Dating back when cable first came out alot of the towns owned (and may still) the cable systems while the cable companies provided the service. Back then if the people of the community had a problem with rate increases or service the town could boycott the cable company since they owned the lines to begin with.

However even back then you'd of only have been boycotting yourself because they didn't think ahead enough to have more than one cable company in an area.

Wireless surely isn't much different. In the states cell phones are considered a necessity and tax dollars are being used to give those that can afford to pop out babies, smoke, drink, and watch cable television free cellphones because they can't afford it.

If governments deem the people need something then you know the taxpayers at one point are paying for it one way or another even if they don't subscribe to the service.