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Tuesday, July 25, 2006

Finnish Bloodbath Finished

Elisa, a small Finnish operator released its 2Q results today. Most noticeable was the dramatic improvement in the mobile operations over the last twelve months.


It is apparent that since the two big MVNOs, Saunalahti and ACN were bought out by Elisa and TeliaSonera the market has stabilised extremely quickly. Churn has fallen off radically and ARPU are now finally on the rise again.

The Finnish market gives a big clue to all regulators throughout the world how to lower prices in a market – increase competition. In the UK, we have seen this effect with H3G UK cutting prices in the extreme, despite the huge sunk costs of the 3G licences. I’m sure that there are a few UK-based oligopolist’s scheming how to take out the disruptive H3G and resume normal shareholder service.

Also, it makes the decision of Teliasonera to launch Xfera in Spain ever more masochistic: they know the forthcoming world of pain and still insist on going ahead, strange…