Mobile deal means more services, but no price cuts

UK consumers will benefit from a wider range of mobile ecommerce services following the completion of Vodafone Airtouch's $180 billion takeover of Mannesmann.

Analysts said the new company, which will be the world's biggest wireless firm, will have the power to command partnerships with major banks, retailers and other ecommerce companies. This would give customers access to a wide range of services.

However, analysts contacted by vnunet.com said the deal would not result in significantly lower prices for users, but said some business customers could expect a better deal.

"UK customers will benefit because clearly they are the core of a large entity. They will benefit from economies of scale and the scope of services will increase," said Keith Mallinson, senior vice president at researcher Yankee Group Europe.

Nicky Scott, senior consultant at researcher Ovum, said the merger will create a "European powerhouse" with enormous strength and power to negotiate content deals.

"For users, eventually this will mean that Vodafone can command major deals with partners for new types of services. Following the handing out of third-generation licences over the next two or three months, the company will be able to offer services such as ecommerce and banking via mobile phones," she said.

Third-generation mobile services, expected to arrive within three years, will provide high-speed wireless data enabling video conferencing and streaming audio and video on wireless devices.

"Vodafone will be able to get exclusive deals. For example, there may be certain types of mobile banking which users will only be able to get from Vodafone. Europe will be able to move forward more quickly with mobile ecommerce provision," said Scott.

Anser Rizvi, a consultant at the Phillips Research Group, said that while services may improve, prices are not going to fall. "The service provision may increase, but I very much doubt that costs will be reduced," he said.

"There will not be any immediate tangible effect on costs, we won't see prices dropping," added Scott.

GartnerGroup analyst Nigel Deighton said corporate customers that use both Mannesmann and Vodafone should demand a better deal. "Businesses using both operators should look for volume discounts."