U.K. May Get Cheaper TV as Mobile Operators Seek Growth

U.K. consumers may end up paying less for services such as subscription television as mobile, Internet and TV companies increasingly compete for the same customers.

Pricing on bundled packages including mobile, Internet, TV and landlines “will continue to be fierce,” EE Ltd. Chief Executive Officer Olaf Swantee said in an interview. Pay TV in the U.K. is likely to come under the most pressure because it’s the least competitively priced of the services when compared with what people pay in other European countries, he said.

“If you take the U.K., each individual product is quite attractively priced when you compare it to other markets, with the exception of pay TV,” Swantee said Monday at the Mobile World Congress in Barcelona.

BT Group Plc has agreed to buy EE, creating a company that controls the biggest fiber broadband and the largest wireless network in the U.K. That’s been the catalyst for a wave of deals and partnerships as rivals look for ways to retain their customers in the face of a new, dominant rival.

Price cuts at one operator could lead to a domino effect as TV, Internet and wireless providers -- which are increasingly offering the same suite of services -- move to match each other’s offers. BT already offers pay TV for free in the form of three sport channels, which give customers access to exclusive Premier League soccer matches and other games as long as they pay for broadband.

Expanded Access

Carriers are gravitating toward offering combined services because it reduces customer turnover and expands access to network resources -- mobile operators get more capacity for data-heavy wireless users when they’re part of an Internet company.

“Quad play today is more of a discount game than a real service game,” Philipp Humm, head of Vodafone Group Plc’s European operations, said in Barcelona. “In markets like Spain and Portugal where carriers aggressively discounted the packages, the bundles make up most of the services sold.”

That may change in the future when customers begin accessing their content across different devices, giving carriers an opportunity to add services on all four platforms.

Vodafone Vittorio Colao said that, although he doesn’t want a price war, he has to compete. Vodafone, the third-largest U.K. mobile company, will begin offering its own TV service in the second half of the year, alongside providing broadband through a wholesale agreement with BT starting sometime in the first half.

“Do we have a discounting approach to it? Not necessarily, but of course we’re not market makers,” Colao told reporters in Barcelona. “The market makers are bigger guys than us. We will play tactically.”

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