In Danemark, in only 6months:
“- the price of a mobile minute has dropped from 0.17 Euro to 0.09 Euro,
– the price of an SMS has fallen from 0.07 Euro to 0.03 Euro,
– the price of a subscription has fallen from 6.7 Euro to 0 Euro.
Mobile consumption has not risen during this period.
The last two years growth in the mobile market has been decimated” (from Strandreports).
The reason is that Danish discount mobile service providers are revolutionizing the national mobile market.
These “low costs, no frills” companies bear a series of similarities with discount airlines:
– the product offered is very simple: mobile service providers have maximum two pricing tariffs,
– they rely on Internet as their main sales and distribution point, saving costs generated by dealer networks,
– they resort to deliberate “confrontational marketing”, making provocative statements that are subsequently discussed in the media.
Unsurprisingly, these low costs mobile companies have eaten up more than 20% of all mobile customers.
The disastrous impact on traditional mobile companies are quite similar to those that knocked down large and established airlines.
Now the question is not “will other European countries face a similar scenario?” but “when will it happen?”