Mobile firms 'failing to innovate'

 

Mobile operators O2 and Vodafone have treated the Irish market as "west London", taking big profits and failing to innovate, according to a leading consultant to the telecoms industry. John Collinsreports. 

John Strand, chief executive of Denmark's Strand Consult, says that while the two companies were making "good money" in the Irish market, they have been slow to introduce the same products and services that they offer in the UK.

Mr Strand is familiar with the Irish market, having consulted for Vodafone, Eircom and O2.

He believes that the former incumbent telco has not benefited from repeated changes in ownership.

"The capital funds that have owned Eircom have not been making the investments to deliver innovation," says Mr Strand. "Broadband is a very good example of that."

Mr Strand also believes that the chances of 3 Ireland being successful in the Irish market "are the closest you can get to mission impossible".

According to ComReg data released in September, 3 Ireland has just 134,000 of the total 4.8 million mobile phone subscribers.

"There are four networks in a country the size of Ireland - forget it," says Mr Strand. "There is room for many brands, but not four networks."

He believes that mobile virtual network operators (MVNOs) targeting ethnic groups requiring long-distance calls, such as Lebara Mobile, which recently launched on Vodafone UK, could be successful in Ireland.

"The two main operators have been trying to keep MVNOs out of the market," says Mr Strand. "The experience elsewhere is that they drive down prices, drive up minutes [ of usage] and increase innovation."

Despite the criticisms, Mr Strand says that Ireland is an interesting mobile market, particularly because many of the indigenous software companies selling internationally to telecoms carriers.

He believes that the State has the potential to become an even more important technology centre - with the only limiting factor is the availability of skilled labour.

"I would not be surprised if the next Skype or something similar in the telco sector comes from Ireland," he says. "In fact, it probably already exists but not many people know about it."

• John Strand will speak at the Third International Wireless Conference which takes place in the Irish Management Institute, Dublin on Tuesday, November 13th