Mobile data strategy, competition and network economics
Founded in 2009, Rewheel is a Helsinki-Finland based boutique management consultancy specialising in the appraisal of mobile data-centric business models with emphasis on network economics, spectrum, capacity, regulatory analysis and competition assessments.

Rewheel's clients are mainly mobile network operators, telco groups, MVNO groups, sector regulators, governments, global internet firms, mobile data-centric start ups, PE and VC investors.

Rewheel is selling and delivering management consultancy work typically on CEO, board, investor and director general (regulator) level.

We have delivered mobile data strategy and network economics management consultancy work for clients in the United Kingdom, United States, Ireland, Switzerland, Finland, Sweden, Belgium, Greece, Poland, Slovenia, Hungary, Russia, Romania. Buyers of our research reports (see: Digital Fuel Monitor) and related strategic workshops include many companies and authorities across Europe and world wide.

In more complex consulting engagements we often work closely together with leading law firms specialising into competition, auction theorists and vendor independent engineering houses.
7 years of thought leadership
Seven years since its launch Rewheel is now a widely recognised authority of mobile data competition and network economics.

Rewheel's mobile data network economics, profitability and competition focused works have been cited by OECD Economic Surveys, The Economist, The Financial Times, The New York Times, Politico, Reuters, Bloomberg, The Wall Street Journal.

Rewheel's findings and insights have been publicly referenced in reports, investor relations materials by the International Telecommunication Union, IEEE, the UK telecoms and media regulator Ofcom, the Belgian telecoms regulator BIPT, Vodafone Group, Telefonica Group, Tele2 Group, Elisa Group, DNA Group, GSMA.

Citations from the EU Policy sphere included: Bruegel (a European think tank that specialises in economics), Vice Presidents of the European Commission responsible for Competition and Digital Agenda, members of the European Parliament.
The State of 4G Pricing in EU and OECD markets
Rewheel’s Digital Fuel Monitor service comprehensively tracks and analyses competitiveness of 4G mobile internet access – prices, usage caps, adoption, consumption – in EU and OECD countries. 41 countries, 139 network operators (belonging to 71 groups), 187 brands, 50 MVNOs, 1,541 tariff plans.

Visit DFMonitor to see Rewheel’s latest (first half 2016) 4G price competitiveness analysis country by country, operator by operator (link).

Competitiveness of 4G smartphone plans with unlimited minutes, SMS and tethering as of first half 2016, EU28 member states and the United States:
CountryGB for €35Price of 20GB20GB-4G-Tethering-€35 met?
Finland (FI)unlimited€24.90Yes
France (FR)50€19.99Yes
Denmark (DK)40€15.41Yes
Estonia (EE)30€19.99Yes
Netherlands (NL)24€32.00Yes
Sweden (SE)23€27.39Yes
Poland (PL)20€13.80Yes
Lithuania (LT)20€28.40Yes
United Kingdom (UK)20€30.48Yes
Slovenia (SI)20€34.95Yes
Luxemburg (LU)15€44.00No
Austria (AT)13€54.90No
Latvia (LV)13not availableNo
Croatia (HR)10not availableNo
Ireland (IE)10€40.50No
Italy (IT)8€40.00No
Spain (ES)7not availableNo
Romania (RO)6not availableNo
Belgium (BE)5not availableNo
Germany (DE)4€92.49No
Cyprus (CY)3€126.99No
Portugal (PT)3€59.99No
Czech Republic (CZ)3not availableNo
United States (US)2€89.00No
Slovak Republic (SK)2€68.00No
Hungary (HU)1not availableNo
Greece (EL)0€81.80No
Malta (MT)0not availableNo
Bulgaria (BG)0not availableNo

Research highlight: mobile data usage in Finland overtakes fixed broadband usage in Germany (link).

Rewheel’s management consultants also aim to explore the underlying market drivers that lead to the diverging 4G competitiveness outcomes. Our papers are published at the Research notes section (link) of DFMonitor.
5G pricing models and small cell network economics
We help our mobile operator clients explore and frame potential future 5G pricing strategies along the three main likely use-case dimensions:
  • eMBB (enhanced Mobile Broadband) – capacity enhancement, 3D and 4K video, augmented reality
  • URLLC (Ultra-Reliable and Low Latency Communications) – low latency, vehicular and industrial automation, self driving cars
  • mMTC (massive Machine Type Communications) – Internet of Things, sensor networks at scale
We investigate the commercial viability of different LTE-Advanced Pro ("pre5G") and 5G pricing strategies and their implications on spectrum demand (low frequency, high frequency and small cell specific bands), network capacity and costs, technology (QoS differentiation, network slicing, NFV, SDN) as well as fixed-mobile convergence strategy and net-neutrality related aspects.
Insights bottom-up
We are among the few senior industry experts who have holistic knowledge and direct insights into the new, mobile data-centric operator business models and drivers of network economics, bottom-up.

The "bottom" includes data consumption demand, cellular network capacity, spectrum (demand, valuation, auctions), network technology (3G, LTE, LTE-Advanced, small cells, QoS differentiation, hardware and software dimensioning), evolving network cost dynamics (near zero marinal cost), network vendors (software and hardware pricing, historic telco vs new IP centric pricing models), network sharing (from passive to active), retail and wholesale (MVNO) pricing.

The "top" means the latest policy and political trends (European political landscape related to net neutrality, mobile market consolidation, spectrum rules), competition analysis, mergers and acquisitions (regulatory and competition authority intervention thresholds, statements of objectives, effective remedies).

Our senior management consultants closely follow and comprehensively monitor all competition, spectrum, network sharing and mobile data pricing developments in EU and OECD member state (through Digital Fuel Monitor).
Market consolidation and new market entry
Our senior management consultants, working for mobile operators and MVNOs, carried out unhampered competition analysis, effective remedy design and remedy assessment in very challenging in-market consolidation cases during 2014 and 2015. Our consolidation related research has been included by DG Competition in the file of the German and Danish mobile mergers and our infrastructure centric pro-competitive arguments are echoed by many sector regulators and the antitrust authority of the European Commission. We support our clients with factual assessments and credible economic, technology and merger regulation analysis and market entry business cases.

In market consolidation and network sharing related consulting engagements typically we work very closely with top international law firms specialising into competition.

Our knowledge covers:
  • Competition concerns and effective merger and network sharing clearance remedies in the form of commitments
  • Competition authority approved mobile mergers in Austria, Germany, Ireland, Norway, planned merger Italy, failed merger in Denmark and the United Kingdom
  • Competition on the network layer and the services layer, short term and long term competitive differentiating factors
  • Merger efficiencies
  • MVNOs, upfront capacity based wholesale access versus throughput and gigabyte-volume based MVNO agreements
  • Structural remedies, spectrum, site, customer base divestments, national roaming for new MNO entrants
  • Affordable open internet access and specialised services
  • Efficient infrastructure investments
  • Use-it-or-lose-it spectrum capacity utilisation commitments
  • Passive and active network sharing (such as MOCN), coverage and capacity based compensation mechanisms
  • Lean, data-centric, LTE-only new mobile network operator entries
Download (1 page, pdf): Effective remedies in telecom consolidations. Telefonica’s and Hutchison’s so called ‘upfront capacity MVNO’ remedies in Germany and Ireland are neither capacity based nor effective. Lessons learned from the Austrian, German, Irish and Norwegian mergers.
Network sharing as a substitute to in-market consolidation
Rewheel, working closely together with leading law firms specialising into competition, has helped European mobile operators to develop network and spectrum sharing strategies and compensation mechanisms that do not raise serious anti-competitive effects and are likely to be approved by sector regulators and competition authorities.

Passive infrastructure sharing, active infrastructure sharing, spectrum sharing, spectrum pooling present different regulatory and competiton authority intervention risk factors, just like the geographical scope, the capacity dimension and technology specifics (e.g. MORAN vs MOCN). Our extensive knowledge on European network sharing cases has added significant value to our clients' decision processes.

The proposed compensation mechanisms are developed based on high level capacity models taking into account traffic geo-disribution (urban versus rural sites), the different software and hardware upgrade costs on low frequency (700, 800, 900 MHz) and high frequency (1800, 2100, 2600 MHz) spectrum bands, the different upgrade costs (mEUR per GBit/s busy hour throughput capacity) and capacity (bandwidth, spectrum efficiency) constrains of the "macro layer" and the future small cell layer.

Apart from the basic coverage and capacity economics of the passive and active infrastructure, the upcoming 700 MHz spectrum auctions also significantly shape the network sharing (joint venture) business cases. We have helped our operator clients factor in potential 700 MHz spectrum acquisition savings into the cost/benefit analyses.

In market consolidation and network sharing related consulting engagements typically we work very closely with top international law firms specialising into competition.
Sustainability of mobile-only capacity play
In Rewheel’s home market Finland the cellular mobile data consumption per capita has exceeded 10 Gbyte per month in 2015. The data traffic keeps doubling year on year while operator CAPEX and OPEX are flat and revenues keep increasing. Bucking the “convergence” trend mobile operators offer unlimited home broadband and IPTV over 4G/LTE and due to the fixed to mobile substitution effect the number of fixed-broadband subscriptions started to decrease in 2015.
  • How far could your macro site grid accommodate data traffic growth given your spectrum and site grid constrains, taking into account uneven traffic distribution in time and space?
  • What software and hardware pricing mechanisms need to be renegotiated with your equipment vendors to prevent costs decoupling from revenues?
  • When will you have to kick-off mass small cell deployment?
  • Is there a case to exit your sub-scale, performance-constrained (and sometimes usage constrained) wholesale access-based fixed-broadband business (e.g. DSL unbundling or bitstream access) and instead offer home broadband (and IPTV) connectivity based on your own 4G/LTE infrastructure?
  • What spectrum mix at what valuation should you acquire in the coming auctions in order to enable the “Finnish mobile data business model”?
Our senior management consultants have answered the above questions for many mobile operator CEOs across Europe.
MVNO network economics
The gradual shift of mass consumer demand from voice and SMS to internet connectivity makes traditional MVNO business models and wholesale network access prices and terms obsolete.

Our senior management consultants have helped the management of leading multinational MVNOs to understand the capacity and network cost dynamics of 4G networks and validate and refine their voice centric to data centric business model transformation strategies.

By developing customised MVNO network economics models we helped MVNOs to assess various wholesale access compensation mechanisms and negotiate competitive wholesale access deals with leading global tier-1 telco groups (as host MNOs).
700 MHz, maximised spectrum efficiency and value
Since the onset of the mobile internet centric 900, 1800 and 2100 MHz license renewal wave in 2011 in Europe we have been providing strategy, spectrum valuation and auction theory advice (together with our world class CCA/SMRA auction theorist partners) to five European award processes (operator or regulator side depending on country), including new entrants and acquisitions as well as license renewals in multi-band (typically 800,900,1800,2100 and 2600 MHz) auctions. So far our spectrum advisory support has been directly impacting over EUR 1bn of European spectrum investments/state proceeds.

In 2015 Rewheel has helped European mobile operators to assess the strategic risks and opportunities associated with the upcoming 700 MHz spectrum auctions, and analysed the likely range of financial impacts of 700 MHz acquisition on active network sharing business cases.

We have live tracked EU's first 700 MHz spectrum auction in Germany (link)
Vendor software, hardware and services pricing mechanisms
Fundamental drivers of mobile data network cost structure and economics are capacity and coverage-linked 4G infrastructure vendor software, hardware and services pricing mechanisms.

Business case of strategic initiatives such as active network sharing and mobile-data centric retail strategies such as fixed-broadband substitution heavily depends on existing and re-negotiated vendor pricing models.

Rewheel has analysed pricing mechanisms of leading vendors like Ericsson, Huawei, Nokia-ALU, ZTE for many operators, tier-1 operator groups (global price books) and incorporated them in techno-economic models for active network sharing (e.g. pricing of MOCN feature), spectrum acquisition, retail pricing strategies, network modernisation RFQ, vendor contract re-negotiation, greenfield market entry.
Net neutral network slicing, QoS differentiation for Internet of Things, Mobile Video, Cloud, Connected Cars
Non-discriminatory QoS differentiation, ‘fast-lanes’, paid prioritisation, sponsored data: a wide range of 3GPP compliant 3G, LTE and LTE-Advanced technology solutions exist that enable innovative mobile data monetization strategies (for internet-access, specialised services, mobile video streaming, Internet of Things, Machine-to-Machine, connected cars, telemedicine) and business models even under the strictest net neutrality regulatory frameworks.

We have the required in-depth technology expertise (our consultants are inventors of world-wide patents related to novel mobile data traffic management techniques) as well as the techno-economic mobile data modelling framework (used for/by over ten European operators for spectrum, technology, pricing, vendor selection strategies) to develop and validate innovative “smart pipe” models.

Download (1 page, pdf): Non-discriminatory, net neutral fast lanes and zero rating. Telcos are absolutely free to discriminate speed, QoS, priority, price between logical pipes. Bits travelling in different logical pipes are not equal.
Competitiveness & profitability from the Finnish perspective
Among Rewheel's clients are the Finnish telecom and media regulatory authority as well as leading Finnish mobile operators.

Finland has among the lowest mobile internet usage prices, the highest mobile data consumption per capita (over ten times higher than Germany's), the highest mobile broadband population penetration, as well as among the fastest mobile broadband networks and best 4G/LTE coverage. All mobile operators in Finland abide by strict net neutrality principles: operators do not apply vertical price-discriminations. Despite the mass-affordable open mobile internet offers and very heavy mobile data traffic the Finnish telecom sector generates healthy returns for its investors (16% ROCE for the market leader operator).
Only senior consultants
Rewheel is privately owned by its leading mobile data strategy and network economics management consultants Antonios Drossos (managing partner, Linkedin profile) and Pal Zarandy (senior partner, Linkedin profile).

Either Antonios Drossos or Pal Zarandy - and most often both of them - take a lead role in delivering any Rewheel consulting engagements.

If the scope requires so, we involve our trusted external senior associates. This has been the case for example when top-class specialist auction theory expertise (CCA), hands-on go-to-market strategy development experience, in-depth engineering skills or EU competition law expertise have been required in our more complex consulting engagements.
Digital Fuel Monitor
Mobile internet access is the fuel of the internet economy.

Technology innovation (LTE-Advanced, 5G, small cells), new radio spectrum bands (700 MHz), net neutrality regulation, mergers, new entrants, network sharing, MVNO deals, telco provisioned mobile video and cloud services, Google's and Facebook's zero-rating platforms – major, often disruptive market changes that may potentially incentivise operators to increase or decrease competition in provisioning open mobile internet access. Volume caps and provisioned speeds may go up. Though, practical experience shows that they often tend to go down.

Get our consultants' often thought provoking analyses and insights (in the form of research notes typically released several times a month) by buying a premium subscription to our Digital Fuel Monitor service.

» Enter the Digital Fuel Monitor website here
Client profiles
Finnish Communications Regulatory Authority

viestintavirasto.fi
Independent regulator and competition authority for the UK communications industries

ofcom.org.uk
Indostrifonden, Swedish government investment foundation

industrifonden.se
Federal Network Agency for Electricity, Gas, Telecommunications, Post and Railway Germany
bundesnetzagentur.de
Commission for Communications Regulation
Ireland

comreg.ie
National Media and Infocommunications Authority Hungary

nmhh.hu
Nordic market leader convergent operator group

ETNO member
Western European mobile-only operation of a global fixed-line incumbent telecom group

ETNO member
Western European mobile-only number 4 challenger

Mobile Challengers member
Western European mobile-only operator belonging to an incumbent EU telecom group

ECTA member
Western European mobile-only operator belonging to an incumbent EU telecom group

ETNO member
Western European market leader mobile-only operator
Central Eastern European independent mobile-only challenger

ECTA member
Central Eastern European mobile-only operation of a global telecom group

ECTA member
Central Eastern European market leader mobile operator of a regional telecom group

ETNO member
Southern European nr. 3 convergent operator

ECTA member
Eastern European mobile-only operator of a global telecom group

ETNO member
European MVNO group
Central Eastern European investors of a new entrant mobile-only operator
a leading global investment bank
a leading US policy control solution supplier
Rewheel Oy

Pursimiehenkatu 7
FI-00150 Helsinki
FINLAND
VAT Nr: FI-22948425
Contact us

Tel: +358442032339
E-mail: rewheel@rewheel.fi
Linkedin: Rewheel
Twitter: @DFMonitor
 Digital Fuel Monitor 

Monitoring mobile internet access competitiveness in EU & OECD countries - by Rewheel

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