Comments on: Mobile operators get closer to their destiny as simple ISPs

By: lsywlw00

lsywlw00 — Fri, 27 Nov 2009 01:44:13 +0000

we can supply brand handbag
chanel and jimmy choo gucci handbag
www.lookhandbag.com

By: brisbourne

brisbourne — Mon, 23 Nov 2009 08:33:12 +0000

Couldn't agree more

By: Dimitri Inglezos

Dimitri Inglezos — Mon, 23 Nov 2009 08:24:01 +0000

I agree with you on this Nic. People want and need to access more and more information on the go.

An ISP type of model for mobile companies would make more sense because then they can expand (or share) their network depending on capacity required.

Perhaps there is a case for mobiles to work together with the traditional ISPs to offer more bandwidth in the future.

If you see companies like 3 here in UK, who provide some basic internet utilities for free (such as Skype and MSN) and Full internet access for a £5 (for a max of 3GB/month) get more and more popular for people.

I guess the challenge here is how to increase profitability in this low margin game by providing value added services or perhaps working in partnership with other online entities.

By: brisbourne

brisbourne — Fri, 20 Nov 2009 10:33:33 +0000

Tks Stewart. I agree, but I try to avoid being too negative.

By: stuartnewstead

stuartnewstead — Fri, 20 Nov 2009 10:07:41 +0000

Hi Nic.

I'm not sure about this. It's worth separating the retail and wholesale threats and opportunities for mobile operators.

At a retail level, convergence of voice/data, analogue/digital content & applications, and (not yet in a big way) fixed/mobile means that mobile operator brands have to compete with other very big guys who have not been traditional competitors, as well as their traditional direct competitors.

At a wholesale level, one of the main barriers to entry - spectrum - is slowly becoming more available, so the uniqueness of a mobile licence is gradually diluting. Also, cost pressures on capacity are ramping up very quickly as iPhone-syndrome spreads round networks. Many networks are starting to share or outsource their network operations, so are seeking cost efficiencies ahead control of their own destiny. This "hollowing out" of their core source of value could have long-term consequences. In addition, the markets can't regard mobile operators as utilities because the latter don't face technology risks, and the regulatory risks they face are also limited. Neither applies to mobile operators.

So ... while I agree that mobile operators have dates with their ISP destiny, I would suggest that they are facing more horsemen of the apocalypse than is in your post.

By: David Semeria

David Semeria — Thu, 19 Nov 2009 15:55:18 +0000

It's not necessarily true that low margin businesses are rated lower by the markets. A high growth low margin business will trade at higher multiples on everything except revenues than a low growth high margin business. All that count are cash flows, profits and growth.

But, you're right – in the sense that if (ceteris paribus) margins fall, so will the multiples and share price.