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Why do utility companies want to sell mobile services?

The mobile market is the topic in the podcast of E24, Valebrokk & Co; “Hysterical profitability in the mobile market becomes a battlefield.” They discuss the high profits of the telecom companies and the new players who start selling mobile services. Why does a utility company start selling mobile services?

Different actors renting mobile networks

In general, it has become easier to enter the mobile market. You do not have to build your own network to start a mobile carrier. “You hardly need anything of knowledge about mobile telephony in advance,” says the interviewer in the podcast. Recently, other players have entered the Norwegian mobile market, serving as service providers in existing networks owned by Telenor and Telia. This means that new players provide the same network access as respectively Telenor and Telia’s customers have.

Uses competitive advantages in other markets

In the podcast, Rolf Barmen, CEO of Fjordkraft, a Norwegian utility provider selling mobile services, is asked directly: “Why should a utility company that supplies electricity to households start selling mobile services?” Barmen replies that the margin in energy industry is really under pressure and they have many competitors that are very active. Therefore, they are challenged to use their own competitive advantage in other markets than utilities. And they chose the mobile market.

The same factory distributes new commodities

Barmen continues and says that: “Mobile services require active selling, and the distribution we have for energy can be utilized within mobile. We buy electricity and sell it on, now we buy mobile services and sell it on. We do exactly the same thing, our factory looks exactly alike, it’s just one of our raw materials that is different. We can leverage our competitive advantages, we can leverage our large customer base, our big influence in the market, a good brand name, etc.

Close to end users

It is commented that Fjordkraft is focused on end user communication, and are experienced in selling a non-physical product that is an essential part of our everyday lives. They have almost 2 million sales calls a year about electricity. “Obviously, it’s cost-effective for us to use any of these conversations to talk with the customers about mobile services. It will be natural. It makes this interesting to us, “says Barmen.

E24 Podkast, Valebrokk & Co: Hysterical profitability in the mobile market becomes a battlefield »

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