It’s estimated that over 50 million adults in the UK own at least one smartphone, making this the country’s most-owned possession, and one which easily outnumbers people.
Yet despite this market saturation, there are only four mobile phone networks to choose from.
So why has this intensely crowded market only been able to support four UK mobile networks? And is this relative lack of choice harming consumers?
Deregulation and competition
Until the 1980s, British Telecom had a monopoly on telephone services across the UK.
It wasn’t until the introduction of mobile phone networks that competition arrived on our shores.
Even then, one of the two first-generation networks – Cellnet – was owned by BT.
Vodafone was the other original mobile provider, while the second generation of cellular connectivity saw Orange and One-2-One joining the market.
Since then, the number of providers has remained at four, due to a series of mergers and acquisitions.
Orange and One-2-One were both amalgamated into the T-Mobile network, before being rebranded as Everything Everywhere (EE).
Hutchison 3G became the UK’s fourth provider when it launched the Three network in 2001, named after the 3G communications which ignited the success of modern smartphones.
Piggy in the middle
There are numerous smaller companies providing smartphone contracts who don’t own proprietary telecoms infrastructure.
Instead, they harness the connectivity of a big four partner, in a process known as either piggybacking or virtual network operation.
For instance, the O2 network is also used by partner organisations Tesco Mobile and Sky Mobile for their own branded services.
EE is the undisputed leader of network sharing.
Companies using EE’s cell towers and masts include Plusnet and Asda – and perhaps surprisingly, arch-rivals BT and Virgin.
It’s interesting that two of the UK’s biggest media giants didn’t feel it was worth constructing their own mobile networks, and instead opted to rent space from a third party.
Then again, both BT and Virgin are investing heavily in domestic services, with smartphone contracts mainly used as a way to entice customers into quad-play deals.
(These are the contracts where one company provides a consumer’s landline and mobile phone contracts, in tandem with phone and TV services.)
Sky is another quad play provider, but its focus on satellite TV and broadband meant it didn’t have enough cash to develop UK mobile networks of its own.
After all, there are huge technical and logistical challenges involved in providing dependable cellular coverage throughout our sparsely populated islands.
And that’s before you consider the immense cost involved.
Few companies have pockets deep enough to build an entirely new network from scratch.
Are consumers missing out?
You might assume the presence of four phone networks would mean there’s a relative lack of choice for consumers.
In reality, that doesn’t appear to be the case.
Fierce competition between the Big Four is keeping prices competitive, while piggybacking brands like Giffgaff and Plusnet also ensure profit margins don’t become over-inflated.
Quad-play service providers such as Sky Mobile and TalkTalk also provide stiff competition, even though their networks are technically owned by somebody else.
There are even advantages to the limited number of domestic smartphone networks.
It’s easier for bigger networks to strike roaming deals with overseas brands, ensuring customer phones automatically connect to a partner network as they step off a plane.
One of the few drawbacks with our limited choice of UK mobile networks is the impact when a network experiences an outage, as happened with O2 last December.
Even so, such outages have historically been few and far between.