[3GScottishUser]

From Vunet.com (28/09/2005):

O2 chief financial officer David Finch has suggested that one of the five UK mobile network operators may fail next year.

The Financial Times reported that Finch made the comments during a conference call with analysts yesterday.

"We wait with interest to see what happens to the financial performance and the remedies proposed by the owners for the weaker players," he said.

Rachel Lashford, an analyst at Canalys, commented: "I have not heard such a suggestion before but it would not be surprising in such a saturated market.

"But predicting a failure in the market is a bit premature unless Finch is looking at O2 that is. But there is little doubt that there will be some consolidation."

Spun off from BT in 2001, O2 has been the subject of bid rumours for months, focusing on possible interest from Deutsche Telekom and Holland's KPN. O2 stands out as a strong player among operators in the UK, but has relatively little coverage elsewhere compared to its rivals.

http://www.vnunet.com/vnunet/news/2142904/o2-finance-boss-predicts-mobile

So who do you think will be the one to dissapear next year?

Vote in the poll above and leave comments below.

[Ben]

I don't actually think we'll lose anyone as quickly as next year, but Mr. Finch thinks otherwise :p

I voted for O2 because they've got a pretty small global footprint and due to the recent takeover rumours.

[3GScottishUser]

For that to happen it'd have to be acquired by one of the others to produce consolodation. Mr Finch thinks 5 will become 4 which if 02 is merged with T-Mobile for example will deliver that result.

There is another possibility. There are 4 networks each with more than 12 million subscribers which will eventually migrate to 3G. That leaves one with anything between 2.4 and 3.2 million presently bearing the same overheads in terms of infrastructure costs. I suspect that will have to change dramatically or the least utilised network will become the most likely to be swallowed up.

Guess which I voted for!!

[Hands0n]

I voted O2 - it will be a Customer driven thing. It appears [to me] that O2 have not really got any particular direction. All of their promotional work seems old and tired. Their tariffs are uninspiring, and they are quite high in comparison - a few deals notwithstanding. Their 3G footprint is .... well .... ummm ... so so. By comparison, the other four seem to be going at it quite strongly (with T-Mobile seemingly in the trailing position at the time of writing).

Of course, all this could change in 4Q/2005

[3GScottishUser]

I have a notion that it could be 02 too but have to disagree with the reasoning above. Having gained over 400,000 new customenrs in the last quarter and close to 600,000 so far this year they appear to have products that the public seem to like. Around 50% of those new customers are on contracts and a significant proportion are on 12 months plus deals. For the first time 02 have over 15 million UK subscribers (not counting the 750K they have through Tesco Mobile) and that's after voluntarily removing non-active subs faster than any other network (3 months inactive use).

02 seem to have a lot of different stategies running in parallel. 3G is rapidly being rolled out now for data users meanwhile i-mode should encourage more handset users to browse information and use e-mail and payment/banking services. HSDPA is on the way in 2006 and 02 remain the favourite network of younger users with innovations like 'bolt-ons', 'rewards' and cheap text/web deals driving demand. Over the last few months they have been proactive in upgrading and retention activity (with UK based customer support and sales) and that seems to have paid big dividends. They have also recently taken an innovative approach to providing mobile TV with DVB-H which is being trailled in Oxford from last week.

There are lots of potentially exciting things happening at 02 right now and the city seem to think they are a very safe bet in terms of investment. If you had put £100 into 02 this time last year it would be worth almost £160 now!! Not bad eh?

Its strange how sometimes we miss the 'real deal'. I know I did in terms of what 02 has been doing lately with a focus on those trumpeting 3G products. Meanwhile quietley in the background 02 have employed alternative customer strategies that appear to have delivered impressive results. I suspect the recent awakening of Voadfone has more to do with 02's threatning rise than any other factor.

Whatever happens in the big shake-out of 2006 customers can look forward to better products and pricing and is'nt it a good news story that the two most successful mobile operators in the UK are still British owned and operated companies.