Fixed-line players driving convergence in mobile market

Fixed-line players driving convergence in mobile market

Fixed-line players are driving convergence in the handset market by using their superior assets to enter mobile, according to broker Goldman Sachs. BT will launch mobile products for the business and household market later in the year – highlighting how the fixed-line telecom companies are weighing in on the lucrative mobile market.

BT will use its wi-fi network to develop the mobile service; the telecoms firm purchased a piece of 4G spectrum, suited to buildings usage, last year. Using wi-fi is more cost-effective than setting up an entirely new mobile communications network, said Goldman, as future innovation will improve wi-fi services.

For the investors out there, Goldman is advising on buying BT and Virgin Media owner Liberty Global in order to benefit from the trend. “We see BT and Liberty as the best ways to play convergence and the mobile opportunity for fixed-only players.” Liberty is also a likely "consolidation beneficiary", it added.

Meanwhile, Goldman says Vodafone is taking the right steps to mitigate the fixed-line threat it is facing in several markets. While the company is vulnerable as it lacks fixed infrastructure in key markets such as the UK, Vodafone believes the risk posed by fixed-line players is overestimated with consumers increasingly switching off wi-fi to move to high-quality 4G services, said the broker. Vodafone is also making buying more data cheaper by making its bundles larger.

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