Telecom consolidation = strange math

Telefonica acquires E-Plus and merging with O2 will make the largest mobile operator in Germany, so let me do the math:



3 + 4 = 1


Well, not really arithmetic, but in this case, adding the #3 and #4 operator (in terms of subscriptions) yields a #1 operator.  This changes the competitive equation somewhat.   Looking at the worldwide mobile telecom space, I was curious to find countries with 4 or more operators, and looking to see where #3 and #4 might consolidate. 



Interestingly, I observe that these countries can be segmented into two groups.  The first group is where #4 is really small and week, and can be acquired by any of the top three without any serious change to competitive dynamics.  The second group are generally markets where #3 and #4 are both relatively small compared to #1 or #2, but the combined entity size is sufficient to make a very strong 3rd contender, and in some cases, overtake the #1 or #2 spot. 


The healthy mobile telecom markets are those with three strong competitors, one that strikes a sustainable balance among the stakeholders – operators, subscribers, vendors and regulators. 



What do you think?  Is three the magic number? 


More analysis at Fixing Mobile Telecom with Consolidation and Pricing