Smartphones are bad for telecom providers, like Vodafone.
Today our phones can do much more than calls and sending texts. The development of smartphones and access to free applications, like free messaging sites through the internet on our phones, it has impacted negatively on the European telecom operators (Telecom Italia and KPN) who are starting to report that they are not making as much profits from the calls and messages.
The European regulators also added to the headache of telecom companies, asking them to reduce the prices (European Union action on termination rates) and allowing customers to have an access to the networks of their competitors (like recent changes to one day number portability, OFCOM), for example will reduce Vodafone’s profit by 2.5 per cent.
Although Vodafone, the world’s largest mobile operator, reported boosted sales by 3.2 per cent to £45.9bn this financial year, they already started to sell off their shares in France with SFR, in Poland with Plus GSM, in China with Chinamobile and in Japan with Softbank.
The media and telecoms consultant, Teresa Wise, in an interview to BBC said that the big companies today have to prioritize which markets they want to be in; otherwise they are spreading their resources thin across the countries. Big telecom companies need to start focusing on their main markets so they become number one or number two player in the nearest possible future.