What’s next for mobile networks such as EE, O2, Vodafone and 3?

In the early days of 2017, mobile networks find themselves in an increasingly complex market situation. They are trying to sell similar, commoditised, smartphones to a market where the majority of consumers already own very similar devices. Upgrades are slowing as the difference between the latest iPhone, Sony or Samsung shrinks with each iteration.

Over two-thirds of British people own a smartphone, leading to a flat market, based around seasonal device refreshes. The networks also see their talk time usage and text message numbers fall as consumers and business users switch to social media, web calling/chat, VoIP and other apps to communicate. This leaves mobile networks with users more likely to switch providers, as brand loyalty fails to hold any sway, and businesses using their own IT services for mobile and unified communications.

The networks are looking to 5G technology for future differentiation and a growing use of app services and content to keep hold of customers while fixed-line conversions offer some opportunity.

The 5G future

The buzz around 5G is already starting to take off, promising HD video streaming, fewer bandwidth restraints in busy areas and the ability to connect billions of IoT devices. It will also enable the networks to rival cable and BT broadband services.

Unfortunately, the technology is unlikely to roll out before 2020, with early trials supported by £740 million of government money to speed progress in 2017. However, as these begin, larger ‘Social WiFi networks’ from Google, BT and others will be competing for data-heavy users.

While users in rural areas may or may not be better served by a 5G rollout, many urban consumers will likely be happy with their 4G experience and see 5G as an eventual update but not a reason to rush out and buy the first device that offers compatibility.

Networks’ apps and services

Each provider currently tries to offer something different to make it stand out from its rivals. Until last year, EE offered two-for-one movie tickets, while O2’s Priority app offers advance music ticket sales, free goodies or meal discounts and other treats. Vodafone tempts consumers with free Now TV or Spotify subscriptions while it tries to capture business customers with its One Net VoIP services.

Increasingly, the mobile networks will need to offer content services too, such as 4K football highlights, exclusive music videos or concerts and other attractions. These deals will be essential to maintain a loyal userbase and attract upgraders, and could see mobile networks making big money deals to buy or partner with content providers to gain exclusivity.

Fixed lines still falling

Both consumers and businesses continue to abandon the traditional fixed line in growing numbers. This provides mobile networks with an opportunity to offer both devices and network services. However, competition is fierce, especially for business users, putting pressure on revenue.

Across these three areas, and new markets like IoT, mobile networks must explore ways to boost their revenue, or risk failing in the marketplace.