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 Monday, February 15, 2010

­The European telecom market is currently undergoing major changes: aggressive competition is leading to falling prices and decreasing revenues. Increased regulation at the European level has exacerbated the situation for many providers. The industry is currently looking for solutions. "We're seeing European providers respond to the changed basic conditions in numerous ways. Companies are constantly in search of innovation and new revenue sources, and at the same time they're also continuing to focus on cost reduction. In some European markets, for example the UK and Switzerland, the current trend is towards consolidation," says Hagen Götz Hastenteufel, A.T. Kearney.

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Convergence in line with what customers want

Integrating mobile communications with the fixed network opens up ways to ensure stronger customer loyalty and win new customers more successfully. "Examples have shown that convergent products can bring down customers' desire to switch by more than half", notes Hastenteufel. Potential for up- and cross-selling increases, which creates competitive advantages over pure mobile communications and fixed network providers. "Convergence fulfils customers' desires for technically high-end yet easy-to-use telecommunications. Integrating the two technologies opens up further scope for product innovation."

But A.T. Kearney agrees that convergence is not a panacea, and will only be successful if implemented in a thoroughgoing, comprehensive manner.

Source: Cellular News