[Ben]

Thanks to Hands0n for the heads-up.

http://networks.silicon.com/mobile/0,39024665,39158299,00.htm

"Speculation is growing that Vodafone is preparing to buy one of the UK's fixed-line telecommunications operators.

The Sunday Telegraph reported that Vodafone has identified Tiscali as a possible takeover target, as part of a push to expand its product offering. Bulldog, Cable & Wireless's broadband ISP, is said to be another option, despite its track-record of poor customer service. Vodafone described the reports as "speculation".

Vodafone currently just offers mobile services - unlike rivals such as Orange, which is aggressively pushing a strategy where it offers both fixed-line and mobile services. With convergence such a hot issue in today's telecoms market, Vodafone is under growing pressure to become more than just a mobile player.

Last month, some analysts argued that the company should even consider bidding for BT.

The mobile operator has been conducting a major strategic review of its future over recent months, and is expected to reveal its conclusion next month. An acquisition of a fixed-line operator would help Vodafone to widen its product range.

However, it could also decide to simply buy and resell wholesale fixed-line services, or even move into the fixed broadband market itself through local-loop unbundling.

Graeme Wearden writes for ZDNet UK"

Other media outlets have also picked up the story.

So, is Vodafone looking to make the leap to ISP in the battle for data? Time will tell.

[Hands0n]

An interesting development, if it happens. But I believe that it inevitably must happen or even Vodafone could find itself marginalised and eventually squeezed out of the market place. Bigger giants have fallen for all the same reasons of non-competitiveness, and noone can really accuse Vodafone of not being competitive and business-hungry. And so it is entirely reasonable to witness Vodafone buy ISPs and other supportive businesses to its strategy, whatever that it :)

But why exactly are these Mobile Operators buying up businesses that would seem completely alien to their core business? Perhaps the following article offers a hint of what is likely to happen and why.



Article source: http://news.zdnet.co.uk/communications/3ggprs/0,39020339,39261960,00.htm

Mobile operators need to evolve their business models to take account of disruptive technologies or they will sink, say experts

Mobile telephony companies need to adapt their business models to compete with major Internet players, analysts agreed this week.

Companies such as Google and Yahoo pose a risk to mobile operators, Gartner believes, as they develop mobile versions of their Internet services. This could encourage mobile users to turn to these companies for their mobile Internet services, making the mobile operators just a provider of connectivity and robbing them of crucial revenue in the future.

A key factor, according to Martin Gutberlet, a vice-president at Gartner, is that Internet companies are much better then mobile operators at creating communities.

"Disruptive players offer more. They create a community, the community becomes robust, then they start to charge. Mobile operators skip straight to the final stage, and then wonder why the community is not there," Gutberlet told ZDNet UK.

Earlier this week, Research in Motion signed a deal that will allow it to offer a range of Yahoo services on its BlackBerry devices.

Gartner argues that mobile operators should respond to this challenge by forming partnerships with Internet companies, so they can launch new services together. But this strategy may fail, if Internet companies decide to go it alone.

"Why should consumers go to operators for Internet services if they are already provided? I can have a Google Mail service on my mobile phone, so why should I go for an operator-offered service?" Gutberlet added.

Technology analyst Dean Bubley agreed that Internet companies pose a serious threat to mobile operators.

"Mobile operators like to think they own the customer. This might be true at the moment for voice telephony, but for interactive services they are very far behind," said Bubley, founder of Disruptive Analysis.

"The consumer interactive experience is owned by the Internet, mostly because of the provision of useful functionality. Internet companies start offering something useful for free to begin with, then charge for other services later," Bubley added.

And Internet telephony could be an even greater threat, warned Gartner.

"Let's look at voice. If I could run Skype on mobile phones, that would be very disruptive. We're not there yet, but could be in a few years. It depends how quickly the Internet guys push — and these guys are so quick at launching network-agnostic services," said Gutberlet.

Netgear and Skype announced in January this year that they were working together to develop a mobile phone that would support Skype over Wi-Fi.