A customer-centric approach to industry consolidation and network convergence

Sylwia Kechiche, Principal Analyst at Ookla, discusses the topic of consolidation and how it may impact consumers if network convergence is carried out incorrectly

In the last few years, consumer perception and expectation of optimal connectivity has evolved. Continued improvements in the performance of fixed and mobile networks has seen the focus shift to “always on” connectivity. 

Getting a service is no longer enough—consumers now expect a seamless network experience that is strong whenever, wherever, across whichever underlying technology.

The industry is moving quickly to scale up 5G networks to meet these expectations. This was evident in Ofcom’s Connected Nations 2021 report, which revealed that 5G network investment in the UK hit £330 million in 2020—an increase of over £150 million (88%) vs. 2019.

While 5G will deliver better performance and experience for mobile customers, its rollout is costly. A necessary network densification to meet ever-growing consumer demands also comes at a price premium. 

Yet, as telcos improve network performance, they can’t afford to keep their eyes off business fundamentals like maintaining a competitive edge and delivering a return on investment for stakeholders. Many telcos see industry consolidation as the remedy.

Consolidating for the future

Merging with competitors and absorbing their network assets is one of the quickest ways for telcos to boost their 5G deployment. 

Scooping up more mid-band spectrum, for example, is gold dust to telcos looking to boost network capacity to support 5G networks. Scaling up 5G is the rationale behind fresh talks of a Vodafone UK and Three UK merger, with Vodafone telling shareholders it aims to “accelerate the rollout of full 5G in the UK, and expand broadband connectivity to rural communities and small businesses”.

Merging with other industry players can also help network operators deliver seamless connectivity across different services. Liberty Global and Telefónica merged their UK operations—fixed network provider Virgin Media and mobile network provider O2—which enabled them to offer a “quad-play” offering of TV, broadband, landline, and mobile services. 

This comes with a double benefit: it appeals to customers who enjoy the convenience of a “one stop shop”, and operators pursuing new revenue streams. 

Industry consolidation is also seen by many as critical to unlocking the true potential 5G holds for the UK economy. But consolidation doesn’t necessarily deliver an improved experience if it isn’t carried out in a way that ensures consistency and reliability for consumers.

Sustaining and continually improving network quality

In practice, consolidation helps mobile operators’ and increases their network capacity by aggregating existing spectrum and radio access sites. It also leaves the acquiring operator with a much bigger network to oversee.

Scalable solutions that drill down into metrics such as signal level, signal quality, and user density helps mobile operators understand their network’s coverage in specific areas. This data can be mapped out against cell site deployments and used to keep a grasp on monitoring as networks expand.

Identifying geographical areas with poor coverage is an important step in prioritsing network improvements after consolidation to ensure delivering on the quality of customers’ real experience of the network.

Feeding the right insights into Service Operations Center (SOC) is another way that  operators can make customer-driven network improvements.

Equipping customer service agents with updates from the Network Operations Center (NOC) and the latest customer reports of issues leads to a quicker resolution of issues and a better experience for customers.

For telcos, objective network measurement metrics will always be critical to monitoring effectively. However, the modern consumer demands more. Any drop in the expected seamless connectivity experience opens telcos up to criticism, and newly acquired customers will be more sensitive to any change or disruption to their network experience.

Quickly resolving these issues by leveraging network intelligence and a customer-centric monitoring approach can prevent any serious reputational damage from ever happening. 

Facing up to today’s reality

Talk of consolidation in the UK’s telecoms industry remains in light of today’s difficult market conditions. Ofcom and regulators across the world ultimately have the interest of consumers at heart. They’re unlikely to stand in the way of consolidation if it results in more reliable, fast and seamless connectivity for the public.

Mobile operators are best positioned to demonstrate that customers are at the heart of their consolidation plans if they have the tools in place to deliver customer-driven network improvements. Showing this intent will be key for operators to get regulators and other stakeholders on board with consolidation proposals.