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Mobile network operators roll over and die

And "communications companies" are born

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2006 in review 2006 saw the death of the UK mobile network operator. The wireless industry seemed to realise that it had come of age and it was time to get serious with a round of consolidations and expansions which turned mere operators into "communications companies" able to operate over any kind of connectivity.

As specific connectivity technologies become less important, the need for standards-conformance decreases. In 2006 the IEEE was increasingly sidelined in the standards process, and there was a rush to deploy products without regard for compatibility or future-proofing.

A year ago we used to claim there were five mobile phone operators in the UK, with a few virtual network operators to make things interesting. But a scant 12 months later there isn't a single company who will admit to being a network operator any more. Today, they like to be known as "communications companies", except one which now wishes to be known as a "media company".

Like my mate who suddenly asked everyone to call him Kate, the changes are becoming more than skin deep. These communication companies don't want to just provide mobile phone services, they want to provide for all your communication needs, and ensure that no competitor sneaks in by providing you with a service they don't.

We are taking the first steps towards having tiers of communication companies: a top tier has the infrastructure to provide every communication service you might want; companies such as Orange who own cables, radio spectrum, and backbones. A second tier can provide most of what you want, and will brand other services to make it look as though they've got it all; BT falls in to this category as it lacks a mobile infrastructure but will still sell you a mobile service. The third tier own no infrastructure at all, but brand everything: companies such as Tesco who provide services on others' infrastructure.

Beyond this hierarchy we continue to have a few niche players, such as 3, which calls itself a media company, and other companies which are unwilling or unable to offer the full range of communication services. Surviving without offering the full range of services isn't going to be easy in 2007 and beyond, so the first part of next year will see several companies broadening their offerings through acquisition or alignment.

2007 will also be a year when content owners find themselves the centre of attention again. Someone will start chanting the internet mantra "content is king" and, before you know it, VCs and investors will have joined in and started throwing money around.

Sky, for example, will be emphasising its content production capabilities and using the capital generated to launch a fixed telephony service in 2007, if not a mobile one too.

But with effective DRM finally being built in to hardware, and HD video going mainstream, anyone with a back-catalogue of video content is going to be predicting huge interest, and income, to any VC who will listen - and there will be plenty of those in 2007.

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