Reducing Wireless Competition in Europe
[External article, The New York Times]
A recent decision by European regulators to approve the merger of two cellphone companies in Germany will significantly reduce competition and encourage further consolidation in the industry. Citing Digital Fuel Monitor research.
Still not convinced that some EU telcos are trying to foreclose the mobile cloud storage market?
In this insight we take a closer look at telcos’ own zero-rated mobile cloud storage apps in Europe. What makes the mobile cloud storage market interesting from antitrust point of view is the fact that it is a well established, growing market with billions of Euros in annual revenues. A number of big internet companies like Google, Microsoft, Apple, Amazon and a plethora of start-ups such as Dropbox, Box, SugarSync, Mozy, CloudMe, justcloud, Carbonite, livedrive, Tresorit, Hightail, TeamDrive, Infinit, etc. are fighting for consumer attention in a competitive open market.
However, the mobile cloud storage market in Europe is just about to stop being open and competitive.
List of potentially anti-competitive zero-rated apps launched by EU’s incumbent telcos
On Gigaom: Forget fast lanes. The real threat for net-neutrality is zero-rated content
Incumbent European telcos are favouring their own or their OTT partners’ messaging, communication, music streaming, video streaming, mobileTV, cloud storage applications by zero-rating the generated volume i.e. volume generated by these applications does not deplete the end-user’s open internet gigabyte volume allowance. Zero-rating is essentially potentially blunt anti-competitive price discrimination. It favours telcos’ own, or their partners', applications and services thereby placing those offered by other competitors at a competitive disadvantage. In markets where big telcos face no challengers, such as Germany, and where the gigabyte prices for open mobile internet access are prohibitively expensive, price discrimination in favour of telcos’ own applications could be a game changer.
Telcos are killing net-neutrality with overly restrictive Gigabyte quotas, anyway
How much of its 4G and 5G radio spectrum capacities Europe should keep for open mobile internet access? How much for telcos' and their business partners' 'walled garden' video, cloud and m-health services (i.e. 'specialised services')
In those EU markets where competition between telecom operators can be best described as friendly net-neutrality is already on protracted coma – and the planned no-blocking & throttling rules of Neelie Kroes’s Connected Continent package will be no panacea. In protected telecom oligopolies (where no challenger mobile operator is present) all parallel fixed-line and mobile infrastructures and radio spectrum have already been or soon are to be consolidated in the hands of few friendly voice-era incumbent telecom groups with vested interests in protecting valuation of their fixed-line assets. In these markets telcos have already started to collectively restrict the maximum volume of open-internet on affordable smartphone tariff plans to just few Gigabytes. In contrast, in genuinely competitive markets, such as the UK, Finland and Austria, consumers could choose affordable (€15-€30) smartphone tariff plans that include very large (>10GB) or unlimited Gigabyte volume allowance.
Spectrum use in Finland and the UK versus Germany
According to data reported by the national regulatory authorities and presented in the first release (1H2014) of the Digital Fuel Monitor the average monthly mobile data consumption per capita varies greatly across EU28. In 2012 the Finnish consumed on average 1.49 Gigabyte every month while the British 0.38 Gigabyte. The Germans on the other hand consumed a dismal 0.15 Gigabyte every month. Why do consumers in competitive markets (where a challenger operator is present) consume up to 10 times more mobile data than consumers in protected markets such as Germany? Are Germans less eager users of the internet?