Mobile operators to see big job cuts

AMSTERDAM: Mobile operators will have significantly fewer employees in one year as they restructure to deal better with price wars and the emergence of virtual competitors, telecoms advisory group Strand Consult predicts.

Factors such as the introduction of new third-generation services, the rising number of virtual operators who resell calling minutes under their own brand name, falling prices and end of subsidies for pre-paid phones should result in a much fragmented market with more finicky customers, Strand said.

"These new behaviours, combined with falling prices, will result in various changes in the mobile market that will affect the operators, handset suppliers and, of course, the retail market," the consultancy group said in a report.

"We believe that in just 12 months - at the end of 2005 - there will most probably be significantly fewer employees in the mobile industry and many executives will be looking at a job change."

In just over a decade the mobile phone sector has become one of the world's big employers. Vodafone alone employs 60,000 staff, most of them in Europe.

Strand, last year, was the first consultancy to correctly predict the emergence of price-slashing virtual operators with ultra-low overhead costs across Europe.

It now predicts that 2005 will be a break-out year for the growing number of virtual operators, such as Virgin Mobile or easyMobile, significantly weighing on prices, especially the pre-paid sector.

The growth of such operators should also benefit established players who sell them the network time for less than they would charge regular customers in exchange for passing on client acquisition costs.

"The MVNO's (Mobile Virtual Network Operators) will become favourites of the press and customers that are not too worried about having the latest and smartest mobile phone will flock to switch from their expensive prepaid subscriptions to the MVNO's Internet-based cheap offerings," Strand wrote.

Next year will also finally see a major rollout of third-generation services. Strand expects some operators led by Vodafone to focus on corporate clients, while others, such as France Telecom's Orange, will go after the consumer market.