Tech Giants’ Grip on Mobile Markets Sparks Concerns
The rise of virtual “eSims” is sparking concerns among mobile network operators, who fear that tech giants like Apple and Samsung could use their market power to squeeze them out. BT, a leading operator, has sounded the alarm, urging the Competition and Markets Authority (CMA) to investigate the potential risks of disintermediation in the telecoms industry.
The Shift to eSims: A Threat to Network Operators
Physical Sim cards have long been the critical link between network operators and their customers. However, the growth of eSims means that operators like BT and its rivals risk losing ground to tech companies, who are increasingly selling phones directly to consumers. This shift could undermine operators’ efforts to expand their offerings beyond traditional mobile services, amid tough competition and shrinking margins.
Operators’ Fears: Losing Customer Relationships
Industry executives fear that as tech companies build direct relationships with customers, operators will struggle to engage with them, sell new products, and gather feedback. Kester Mann, of CCS Insight, notes that network provisioning is becoming more remote, reducing operators’ opportunities to interact with customers. This could ultimately cut operators out of the loop, making it harder for them to compete.
The Rise of Virtual Mobile Networks
In the most extreme scenario, companies like Apple could use eSims to launch their own virtual mobile networks, similar to GiffGaff and Tesco Mobile. While analysts consider this unlikely in the near term, it highlights the potential risks of tech giants’ growing influence in the mobile market.
Industry Voices: A Call for Caution
BT is not alone in its concerns. Virgin Media O2 has also raised alarms about tech giants tightening their grip on mobile markets. Vodafone, too, is working to address concerns about the strength of big tech. However, industry sources caution that operators have lucrative partnerships with tech companies and are keen to maintain good relations.
Apple’s Response: Fostering Innovation and Competition
In response to the CMA investigation, Apple emphasized its commitment to thriving and dynamic markets, where innovation can flourish. The company believes it faces competition in every segment and jurisdiction, and its focus is on earning users’ trust. Apple will continue to engage constructively with the CMA as the investigation progresses.
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