Author(s): Kester Mann
At the start of what I'm sure will be another fascinating year in mobile, here are five markets I'll be keeping a close eye on over the next 12 months.
One of the world's most unbalanced markets is finally set to become more competitive. Mexico is dominated by America Movil's Telcel subsidiary, which has accounts for nearly 70 percent of the country's subscribers. Closest rival Telefonica trails with just 20 percent.
In November 2014, US giant AT&T announced the purchase of third-placed operator Iusacell for $2.5 billion. The company hopes to benefit from the advantages of its huge reach in North America, which now extends to 450 million people. With deep pockets, the carrier will be aiming to quickly improve network coverage and could embark on an aggressive marketing campaign based on lower prices.
The transaction was made possible by recent reforms by Mexico's president to encourage more investment in the country. The country's telecom regulator has forced America Movil to share infrastructure and stop national roaming charges. In an effort to placate authorities, America Movil agreed last year to dispose of certain assets in Mexico, raising the prospect that other international companies could also enter the market.
Germany could turn out a crucial barometer of European consumers' appetite to sign up to a single provider for all their telecom services. It's seen a slower transition to multi-play services than other leading markets such as France, Spain and Portugal. However, this is set to change in 2015.
Following the acquisition of Kabel Deutschland in 2013, Vodafone has launched its All in One package, combining mobile with home phone, Internet and TV. Rival Deutsche Telekom is pushing its own quad-play offer, marketed under the MagentaEins brand.
Pricing of these bundles is less competitive than in cutthroat markets such as Spain. Uptake in Germany could offer a valuable indication of how likely customers are to embrace multi-play products.
I'll also be keeping a close eye on the impact of O2's deal to buy E-Plus. The move consolidates the market to three mobile network operators and creates a new leader in terms of subscribers. It'll be interesting to see if the acquisition has any effect on mobile tariffs following the European Commission's concerns that the deal might lead to higher prices.
Late in 2014, Xavier Niel acquired Orange Switzerland through his holding company, NJJ Capital. The move could prove hugely significant in a market that Swisscom has dominated almost unchallenged for many years. Swisscom still accounts for nearly 60 percent of mobile subscribers, well ahead of Sunrise (22 percent) and Orange (19 percent).
Mr Niel is the man behind Free Mobile, the fourth operator in France whose bold and innovative launch in 2012 triggered a ferocious price war. Rivals scurried to reduce tariffs in response, but customers flocked in their droves to the new provider.
Although the Swiss market may not be as price-sensitive as France, Mr Niel will almost certainly deploy a similar low-cost strategy that'll put significant pressure on prices. He could also seek to merge Orange and Sunrise in a move that would finally create a serious competitor to Swisscom.
Here's an interesting fact: Indonesia is poised to become the third-largest mobile market on the planet. With more than 300 million subscribers, it's already ahead of Brazil and Russia and is on track to surpass the US within months.
Admittedly, average spending per customer is low at around €5 a month and almost all subscribers are on a prepaid tariff. But some leading manufacturers are racing to capitalise on a growing appetite among the youthful population for Internet-ready phones. Chinese manufacturer Xiaomi is already making a big impact with its Redmi range of low-cost smartphones, and Samsung plans to open a factory to produce devices for sale in the country.
Indonesia is already seeing encouraging uptake of 4G following the launch of a TD-LTE network by upstart operator Bolt in late 2013. In less than a year, it's signed up over 700,000 customers and plans to expand coverage beyond major cities in 2015.
Telefonica's purchase of GVT late in 2014 could trigger further consolidation in the world's fifth-largest mobile market. The move puts pressure on Telecom Italia, which was also interested in buying a local broadband provider, but could now find itself vulnerable to a takeover. Competitor Oi has been strongly rumoured to be planning a bid, and Telefonica may be looking to strengthen its position. However, any deal for TIM Brasil would not come cheap: the company has a market capitalisation of about $10 billion and Telecom Italia would demand a high price for an operation that offers a huge growth opportunity outside its moribund home market.
As Rio de Janeiro gears up to host next year's Olympic Games, mobile operators will be looking to push 4G coverage to gain competitive advantages. TIM Brasil, Vivo and Claro all secured 700 MHz spectrum at auction in September 2014 to complement their 2.5 GHz frequencies won in 2012.