PRINT THIS PAGE Going mobile
31/08/2001. Source:McKinsey Quarterly.
The number of mobile telephone operators in the European markets is growing at a phenmomenal pace. This article from the McKinsey Quarterly looks at the issues that landline operators must now face.
Although mobile operators are in an enviable position, they will face difficult trade-offs. Pricing services low to capture market share could erode profitability for years. Meanwhile, landline operators too have options, including switching customers to their own mobile services and building their data and broadband offerings.
As the market for mobile handsets nears saturation, and consumers learn to switch among competing service providers, the battle for residential voice traffic will intensify. What should a company do? Computer modeling lets managers construct alternative scenarios and test the possible results of pricing or investment decisions. Modeling suggests, for instance, that 40 per cent of European phone customers will give up their landline connections by 2010 and that price wars between mobile and landline operators may follow.
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