The network economics behind mobile consolidation

Mobile consolidation is no longer just a deal story – it is a network economics story.

As data growth stabilises and the race for capacity slows, operators worldwide are shifting focus. The priority now is extracting more value from existing assets, improving efficiency and funding the next wave of network investment. Consolidation is becoming a key lever to achieve this.

In this video, Caroline Gabriel, Partner, explains how consolidation is reshaping mobile networks. Caroline explores how it drives scale, improves efficiency and unlocks new investment, while also increasing competitive pressure.

Caroline also highlights the realities operators must navigate, from integrating complex legacy networks to aligning people, processes and technology.

The message is clear: consolidation can unlock significant value, but only with a clear understanding of how networks, economics and strategy come together.

If you are exploring consolidation, now is the time to act.

Learn more about how we support operators, investors and lenders in a consolidating mobile market or speak to one of our experts now.  

Transcript  

What is driving the focus on mobile consolidation in network economics?

Mobile consolidation has become a critical issue for network economics now because of changes in the pattern of data traffic that runs over mobile networks. Decades of growing, racing after extra capacity and extra spectrum are sort of coming to an end as that data growth tails off. And so now operators are looking more to make as much as they can out of the assets that they have, and consolidating, merging together and scaling up from there is one way to achieve that.

Where can challenges arise when integrating networks following a merger?

I think operators mainly underestimate network integration complexity in two ways. One, when it comes to people. There is always lots of attention on how you integrate the technologies, but people, teams, culture and processes tend to be far harder to integrate effectively. And the second one is integrating legacy networks, which are not necessarily delivering huge amounts of value, but they have to be maintained over several decades.

How can consolidation affect network economics?

I think it depends on the motivations for the consolidation. If it is all about efficiencies and scale, then it is really driving other operators to reduce their costs and to seek mergers of their own. It can be a kind of snowball reaction. If the main purpose of consolidation is to unlock investment for faster growth in new technology, for instance, then again that triggers a different approach. That can trigger a race to invest in technology to try and remain competitive, which can of course be very challenging for smaller operators.

What makes network synergies difficult to achieve in practice?

Network synergies are extremely hard to realise and, as a result, they are often overpromised because operators get caught up in what, on paper, they believe they could achieve. They almost do not want to pay too much attention to the realities of doing that. They are extremely difficult to achieve, partly because there are a lot of people involved, going back to the previous point, but also because these are huge, complex networks that have been built up over several decades and several generations of technology. So there is nothing easy about making those work together more efficiently than they work separately.

What actions can operators and investors take to realise value from network synergies?

With cost savings and synergies under so much scrutiny, I think the key step that operators must take when considering consolidation is to benchmark. I think operators look long and hard at Excel and theoretical business models, but what they actually need to look at is the experience of operators who have already been through it, for good or bad. Analysys Mason has a huge and long experience of being part of consolidation and other transaction projects, so we have enormous insight into what can go right and wrong. Obviously, sharing individual experiences can all feed into us being really expert at providing benchmarks.

How does Analysys Mason uniquely support mobile operators and investors with mobile consolidation? 

I think Analysys Mason uniquely supports operators and investors during consolidation because our experts cover every aspect of the cycle that companies will go through. We have a very big research operation, which is unusual in our industry, which can help with scoping markets, sizing markets, really feeding into the viability testing of a deal. And then, of course, our consulting teams can look at everything – transactions, strategy, transformation of the business even after the consolidation is achieved.