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T-Mobile: The future means cheaper calls, fewer operators

The company's CEO Rene Obermann expects the prices of mobile calls to start to fall in line with their fixed line counterparts.
Written by Jo Best, Contributor

Rene Obermann, CEO of T-Mobile, said today that he expects the rash of mergers and acquisitions that has spread across the mobile world to continue.

With the industry recently bearing witness to Telefonica's £17.7 billion (US$30.8 billion) takeover of O2 and a $67bn (US$116.4 billion) tie-up between SBC and BellSouth pending, Obermann told delegates at the Gartner Mobile and Wireless Summit in London that more consolidation is to be expected.

"The existing operator landscape is changing and that change will happen at an increasing speed," he said. "I think in Europe there is a need for consolidation. I think we'll have more consolidation – it's unavoidable."

But he added: "There's more rationality there now than five, six, seven years ago. Companies are not rushing in paying those outrageous prices."

Greater consolidation is not the only big change the T-Mobile boss is expecting in the mobile industry: Obermann said he expects the death of the landline may not be greatly exaggerated and that prices for mobile calls will start to fall into line with their fixed line equivalents.

"I'm not suggesting there won't be a premium for mobility," he said, "but the spread [between mobile and landline pricing] is coming down."

Obermann added that he believes the cost of roaming will also follow a similar downward path.

"I think there is a need for roaming fees to go down," he said. "Roaming is becoming more and more competitive."

"People might ask: 'Why not reduce [roaming costs]?' We did, inasmuch as we can without screwing our margins... I don't think there's a need for regulation," Obermann added. "The EU and politicians are the voice of the people and people think they're paying too much. Yeah, it's true but it's coming down."

EC Information Society commissioner Vivianne Reding recently promised a shake-up in roaming charges, promising cuts of up to 60 per cent.

Obermann, however, said the European Commission has taken the wrong stance on the issue. "I think the concept is wrong – they want to regulate retail rates... they should look at wholesale rates."

Jo Best of Silicon.com reported from London.

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