When cable companies offer mobile services, mobile providers pay the price

Mobile growth once gave warmth to the glacial European fixed-line telephony market. Today, it is often a mere enticement that cable companies toss to restive customers.

In a recent European survey by Berenberg Bank, nearly half of respondents wanted mobile sold together with video, broadband or fixed-line telephony. Message received, says Liberty Global, the largest international cable television provider, covering 12 European markets, and an eager product bundler. But what warms the hearts of consumers casts a chill over mobile service providers. More bundling means more discounting. Cable companies that bundle mobile services care less about mobile profits than stopping their cable customers changing providers. All this has added to the pressure on return on capital for mobile operators. Wireless players in four of the six markets in which Liberty operates have return on capital employed below the western European average of 9 percent.