Mobile Operators Are One Step Closer to Losing Their Monopoly

Thursday, 01 April 2010

mobile operators monopolyOFCOM has forced Mobile operators to lower their fees for transferring calls from one network to another from around 4p a minute to just 0.5p a minute. A move that has been welcomed by everyone involved (even some of the mobile operators). But this story is small news compared to the tectonic shift in mobile operations which must occur soon.

Scarcity of Supply

Mobile network providers can only levy such massive charges because of the scarcity of supply. At the moment we are all forced to use a mobile network to get access to voice and data services on the move. But with the expanding WiFi coverage in the UK and possible introduction of WiFi towns (like Swindon), this scarce resource is set to become highly abundant.

Voice over IP

Voice over IP is a mature technology. With a major fire at BT’s central London node yesterday landline communications all over the country were disrupted. But Zeta’s voice over IP system was unaffected because IP is designed with redundancy so that a call will always find a way around a damaged node.
With Skype now resident on the apps lists of our smart phones, VoIP on the go has become a reality. So when we are all living in WiFi towns why do we need the likes of Vodafone and O2 who are making massive profits from providing rudimentary data services? We all send emails for free – any size, any length, with massive attachments – so why should we pay 5p to send a meagre 140 character SMS message? in the WiFi world we won’t need to.


The logical step for mobile operators is to simply become network service providers like your ISP. Everyone pays a flat rate subscription to access the network which gives us high speed 4G data rates with which we can do as we please. Fair usage aside there will be no call charges , definitely no SMS charges and video calling can finally get off the ground.

Who’s going to pull the trigger?

All it takes is for one network to switch to this model and the others will be forced to follow. If the others are slow to react they could find there are no customers left to win. Today’s announcement is a big step towards realising this scenario – if I started a mobile operator tomorrow I would make all calls, texts and data usage free and just charge when calling another network or landline. If it’s free to move to my network with a modest monthly network fee wouldn’t you encourage all your friends to move too?