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June 28, 2012

Strand Consult Blasts Regulators

By Gary Kim, Contributing Editor

Rarely do research and analysis firms blast communications regulators for obstructing progress as much as Strand Research recently did. In fact, Strand argues, technology and competition are reshaping the global business without need for regulatory intervention.

Competition, generally speaking seems not to be an issue, especially given the dominant role mobile communications has assumed.  Market forces and technological development have created the massive new availability of communications, not regulation.

Likewise, the competition between mobile operators has resulted in the development of new products that has increased the availability of mobile telephony to everyone, rather than just certain groups in society. The introduction of prepaid products was not a result of regulation, but a result of a creative industry and competition.

Nor has regulation contributed to the better prices for devices. “This is not due to regulation, but is a result of the technological development and that subsidies offered by mobile operators have often increased customer demand for new smart mobile phones,” Strand Consult says.

In many countries customers have better mobile coverage than mobile operators are obliged to offer under the terms of their mobile licenses. This is solely a result of competition between operators, Strand Reports says. So too is the decline of international calling prices driven by Skype (News - Alert) and others.

Mobile broadband prices also have created competition for fixed line broadband services.  “This is not a result of regulation, but due to the technological development that has enabled mobile broadband to compete against fixed line broadband,” Strand Consult argues.

Cable TV providers also have contributed in increasing competition on the Internet and fixed line telephony markets, again not a result of regulation, Strand Consult argues.

Internet Protocol likewise is revolutionizing the business.

“In fact we could go on,” Strand argues. But, “for some reason politicians and the regulative authorities are trying to elevate their role and the importance of their work to a level where it simply does not belong.”

“Politicians do not realize that most of their regulations and price reductions are distorting the mobile market, resulting in companies that develop new technologies losing part of the revenue they were receiving from the companies that are billing roaming revenue,” Strand argues.

“The result of the politicians’ regulations often only benefits the very largest mobile operators that already have an enormous cash flow and has a negative impact on smaller market players with smaller cash flows and less financial backing,” Strand analysts further argue. “Perhaps politicians should start taking a closer look at the importance of the technological development for the future development of society?” Strand Consult analysts ask. 

All of that is rather blunt talk from a research outfit.

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Edited by Amanda Ciccatelli

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