James Robinson, senior analyst at Assembly Research, said “direct-to-device” services would be an important part of finishing the “connectivity puzzle” but cautioned that they would “not be able to replicate traditional 4G and 5G networks”.
The UK is the first country in Europe to move ahead with D2D authorisation, while the EU is consulting on similar proposals until the end of the month. Similar services are already available in the US, Canada and Australia.
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Matthew Howett, founder of Assembly Research, said: “We need to wait and see if what’s proposed is enough to satisfy the government on its mission for growth.”
He said that any proposals needed to be compared to the list of strategic priorities for the regulator, which are set by government and have not yet been published.
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Should the biggest challenger hit trouble itself, however, its backers could pull out of the sector and lenders to other alt-nets could also start to call in their debts.
“A knock of confidence among investors in CityFibre would spell trouble for the wider alt-net market and their funding positions,” says Matthew Howett, the founder and chief executive of Assembly Research.
“While never too big to fail – and we consider that unlikely – smaller fibre providers almost need them to succeed to secure their own futures.”
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“If consumers and investors respond positively to the UK deal, it could give Vodafone licence to do more deals in other countries,” Howett says. “Others in Europe have looked on enviously as the CMA has allowed consolidation of operators as a way to propel investment in infrastructure. The previous EU competition commissioner, Margrethe Vestager, had been very anti-consolidation, and there is pressure on her replacement [the Spanish politician, Teresa Ribera] to allow more deals.”
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Matthew Howett, founder and chief executive of Assembly Research, said that a successful appeal “would be hard-fought, expensive and face a high bar”. He expected “positive implications overall” for wholesale customers, consumers and businesses.
Howett said this was one of 10 attempts at large domestic telecoms deals in Europe since 2010. The majority were approved but often with structural commitments that “undermined the rationale for the mergers”. He added that operators on the continent would “have to wait to see” in terms of any revised approach to competition policy after calls from executives across the sector to be allowed to scale via consolidation.
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Matthew Howett, Founder and Chief Executive of Assembly Research said the CMA’s decision “sets the wheels in motion for a transformation of the UK’s mobile market, and ultimately the experience for consumers”. He added: “We expect positive implications overall, not only for investment in, and the quality of, networks (including standalone 5G), but also for the wholesale customers and consumers and businesses that rely on them.”
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James Robinson, senior analyst at Assembly Research, said the Spanish government likely felt more comfortable about approval given its own holding company had built up a stake in Telefónica “to offset foreign influence over a strategic asset”.
He added STC had not hit the 10 per cent mark, which would “instigate a fuller national security review.”
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"Matthew Howett, chief executive of Assembly Research, says Kirkby has impressed investors by seeing through the cuts and focusing on BT’s core broadband and connectivity business. “It’s a return to basics and making sure the core parts work well and are profitable,” he adds. “I wouldn’t be surprised if we saw disposals of non-core assets.”
Howett says Kirkby, who was previously chief executive at Telia, the Swedish telecoms company, and has been on BT’s board since 2019, impressed with the speed at which she got to work fixing long-term issues and “bringing everyone on board for the journey”. “There is a lot of staff, and a lot of them are engineers working out of vans around the country, not people in offices in London,” Howett says. “She is out there visiting everyone everywhere.”
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BT has resumed the transition after forming a new telecare action board alongside local authorities and healthcare providers. However, there is still uncertainty over how many vulnerable customers will be affected by the switchover.
Matthew Howett, founder and chief executive of Assembly Research, said: “Fibre does present resilience challenges itself, particularly in the context of power outages and device compatibility.”
But he added: “The more reliable, resilient and future-proof alternative of fibre and IP communications will ultimately mean fewer faults and outages over the longer term.”
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CK Hutchison’s merger of Three Italia with Wind Telecomunicazioni was approved only after the companies agreed to divest assets. More recently, regulators told Orange and MasMovil they had to grant spectrum and roaming access to rival Digi as part of their Spanish merger.
Howett says these remedies have “only compounded the problem” by allowing new entrants into the market just as the existing players are trying to consolidate.
“Where four to three has been allowed to happen, the remedies that you put in place have often just recreated the problem you’re trying to solve,” he says.
