Mobile Operator consolidation in Germany has begun - France Telecom to buy Mobilcom
The consolidation of mobile operators has already started. Experts are forecasting it for a long time now: 6 UTMS operators are simply too many to survive. The market has got only 100% and the big two, Vodafone and T-Mobile, each already have a market share of 40%.
With the upcoming takeover of Mobilcom by France Telecom a prediction is coming true that telecom analyst Joeri Sels of the Bank Julius Bär published on the 14th of February in an in-depth analysis of the future of Mobilcom. Sels comes to the conclusion that an early takeover bid by France Telecom is "probable". Reading Financial Times Germany during the last couple of days it looks like Sels was right: Gerhard Schmid is arranging the details of his retreat and negotiates the price for his Mobilcom stake to be bought by a couple of banks on behalf of France Telecom. At the same time, France Telecom and its mobile operator Orange have over 60 billion Euro debt that is laming their speed of market penetration. Thus Mobilcom, most probably rebranded into Orange very soon, will not be the first UMTS operator in Germany but rather among the last ones.
Greenfield operator Quam, Joint Venture of Telefonica and Sonera, celebrated at CeBit their newly acquired 75.000 customers that they subsidised quite a bit, e.g. 6 months without monthly subscription fees. With organic growth Quam will never make it on the German market. They have to buy some of the smaller players like talkline, debitel or 02, ex-Viag Interkom. Quam's co-owner Sonera does not have the financial muscle and apparently wants to get rid of their stake. Already today Quam is managed from Madrid. Moreover, Sonera's merger talks with Telia emphasize that Sonera first has to survive in Scandinavia. Together Telia and Sonera are probably not strong enough to push it in Germany.
O2 belongs to British Telecom through its mobile subsidiary mm02 which itself is under severe financial pressure leading to rumours that O2 soon will be sold, too. This is funny as right now O2 is about to start an expensive rebranding campaign. Consumers might probably not remember who their operator is if O2 gets another repaint soon: Blue to Orange or Green or what?
And E-Plus might change the owner, too. Their owner is Dutch telco KPN respectively KPN mobile. KPN is known to have financial troubles. And if NTTDocomo that already owns 15% of KPN is really serious about penetrating Europe then they might buy E-Plus from KPN.
Summing up I assume we will have 4 mobile operators left in Germany with enough customers to be able to make profits. Next to Vodafone and T-Mobile, there will be NTTDocomo/E-Plus and most probably France Telecom/Orange. The ones not on this list better stop spending billions without any real chance sooner than later.
