TalkTalk, Vodafone & Telefonica

Of Mergers and MVNOs

Interesting mix of news this week as TalkTalk ditch Vodafone’s MVNO in favour of Telefonica O2 whilst at the same time Vodafone are rumoured to be looking at buying TalkTalk.

I’m not going to dwell much on the subject. The web will be awash with industry experts analysing the subject, holding it upside down and shaking it.

I’ll just fade momentarily to the Vodafone boardroom (cue ethereal music) …

“Sir, Sir, looks like we lost the TalkTalk MVNO business to O2”

“Hmm bugger, that was incompetent. It’s going to hurt our market share. What’s your answer to the problem?”

“Well Sir we could buy O2…”

Music swirls and brings us back to the present. John Wayne gets on his horse and rides into the sunset. Wrong story.

It does seem clear that the world is moving more and more towards one bill for all communications services. Vodafone need to join the club or lose out. One might consider that O2, in ditching their broadband offer, have already given up on that race.

An MVNO deal whilst good for subscriber numbers can’t be that great for margins and O2 will have had to dive in with a very aggressive offer to tempt TalkTalk away from Voda (don’t know the whole story here – maybe they were getting poor support). Having ported numbers away from an MVNO at Timico I know what a hassle it can be to swap services.

In the communications world it does feel as if mobile is just becoming a bolt on to fixed line services. I wouldn’t have made that statement a year ago and I may be wrong now but that’s certainly how it feels to me.

This is odd as the mobile is increasingly becoming the device of choice for making phone calls. For example our home phone is currently out of action. The broadband still works ok so I’m surmising its a broken bit of kit on the voice path in the exchange. For most of us in the house not having a phone line it isn’t a problem as we all use mobiles.

The only person who can’t call us is the mother in law who at the age of 81 doesn’t want to mess about learning new numbers.

EE have up until now, and since O2 left the game, been the only mobile operator aggressively chasing fixed line services growth, at least in the consumer market. And EE still have a long way to go to catch up with BT, Sky, Virgin and TalkTalk.

I suspect that TalkTalk would be an expensive acquisition for Vodafone. Their management will feel they are doing alright as they are which I very much believe to be the case.

If nothing else it all serves to show that our world is a constantly changing world. It’s what makes it exciting to live in.

Ciao bella:)

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