Data deep dive: Will the merger of O2 and 3 impact U.K. 4G quality?

With O2 and 3 in the throes of a merger, there’s been a lot of discussion over how the combination of two of the U.K.’s major operators would impact mobile competition. Will reducing the U.K. mobile market to three operators trigger price hikes for consumers? Will consolidation mean less innovation? Will U.K. operators have less incentive to invest in their mobile networks if they have fewer competitors?

We don’t know the answer to all of those question, but OpenSignal is uniquely qualified to address the last of them, as we collect data on mobile networks in more than a hundred countries across the globe. We thought it would be interesting to see if the number of operators in a country had any impact on the quality and performance of its mobile networks. Specifically we looked at 4G, because LTE represents the latest wave of mobile investment, and we looked at major countries in the European Union as they share the greatest similarities to the U.K. in terms of spectrum, regulation and mobile pricing. We took a snapshot of the current market conditions, using data collected in the three months between November 1 and January 31.

The plot chart below shows what we found. Average LTE speed is measured on the horizontal axis and LTE coverage measured on the vertical. Countries that have only three major operators are represented by triangles, while countries with four are squares.

Chart created by Teresa Murphy-Skvorzova (Data source: OpenSignal)

Chart created by Teresa Murphy-Skvorzova (Data source: OpenSignal)

As you can see there doesn’t appear to be any correlation between number of operators and investment in 4G. The Netherlands and Hungary offer two of the most robust LTE networks in Europe, but the former country has four operators while the latter has three. Both the country with the slowest LTE speeds (Germany) and the country with the worst coverage (Ireland) hosted only three operators. But most of the worst performers in our chart were major economies in Western Europe – the U.K., France and Italy – all of which are four-operator markets.

Oddly if there is a pattern we can detect in this plot chart, it’s that a country’s population seems to have a much bigger impact on LTE investment than its number of operators. Smaller northern and eastern European countries, for the most part, have gotten the jump on the EU’s major powers when it comes to building out far-reaching and technologically superior networks. It looks like the best way to tank your country’s LTE performance is to boost your population up to 50 million.

Of course, that’s only one interpretation. A number of factors can influence the coverage and speed averages of any individual country. For instance, the Netherlands and the Nordic countries tend to have a high degree of urbanization, which helps boost their coverage numbers (the more closely packed people are the more likely they will fall under a cell tower’s signal umbrella). Meanwhile, eastern European countries tend to have fewer 4G subscribers, which in turn boosts average LTE speeds (there are fewer people with whom to share 4G capacity).

Keep in mind we’re not saying that the merger of O2 and 3 won’t have an impact on the U.K.’s 4G landscape. Nor are we saying there won’t be any competitive or consumer repercussions from the merger. We’re only saying what our data shows us: in Europe, the number of operators competing in a market doesn’t have any bearing on the performance of its 4G networks.

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