Whenever two operators (or any two companies for that matter) decide to partner, the benefits are always presented as good for the customer. The partnership message should be presented in this way.
However, the competitive viewpoint needs mention since competitors don't simply partner for customer value alone. DT and Orange are considering cooperationto share Wi-Fi assets. The question is why? Review of their mobile footprints show that they have fairly complementary mobile network footprints so they are not necessarily trying to avoid a customer acquisition war. Both are in the Freemove Alliance - are data roaming rates in the alliance simply unprofitable?Or have EU imposed data roaming rates pushed the alliance?
While these factors are likely contributors, the underlying reality for all operators is the rapid growth of mobile data traffic. ABI's own analysis shows mobile data traffic estimates continue to increase. The press release notes that "the international traveller of tomorrow will want to be able to download large amounts of data, for private or business reasons, without having to be burdened with the choice between WiFi access and 3G mobile access." This is an important statement as a few high bandwidth users will lower the threshold for overutilization if their use is during peak traffic times.
The reality is that even with data caps and overage fees, data traffic trends indicate that new networks and spectrum will be needed to handle increasing traffic. But operators need to use their capital efficiently because competition is limiting any margin gains through pricing mechanisms. The DT-Orange cooperation announcement demonstrates a new reality - operator tools for addressing the traffictsunami now include more than just optimization of their own network assets, but "openly"announcing the need to leverage others network assets as well.
The second half of this story remains to be seen -if the operator eases connectivity, can they reap some of the potentialrevenuebenefits?
