With the dust starting to settle on the Nokia and ALU news, it’s clear that this won’t be the last M&A story we’ll be talking about this year. Mergers amongst operators are becoming rife and the moves in the vendor sector mirror this.

We’ve already talked about the good and bad sides of operator mergers with one particular aspect being the impact on innovation. With multiple competitors watching every move in an attempt to capitalise on any mistakes, can we blame any operator that doesn’t want to experiment with an unproven technology?

In the vendor world, the picture is much more complicated as operators need both global scale and interoperability alongside innovation and new ideas. So what is the impact of fewer vendors on operators and what does this mean for the industry?

The importance of scale for the mobile industry cannot be overstated. Products needs to be developed for a global audience and, more importantly, in line with global standards. So on face value, bigger vendors with an increased reach and larger R&D teams.

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As the industry gears up for 5G, we need lots of dynamic, fresh thinking and innovative companies driving new standards and approaches. Bigger companies are not always best placed to deliver this.

Additionally, less choice brings risks for operators, who may seek to second-source, but are often beholden to investments in single-vendor ecosystems. In particular, it’s a guilty secret of the industry that standards give no guarantee of inter-vendor interoperability: indeed this is the exception rather than the norm.

So where does this leave operators?

Faced with a smaller pool of vendors to choose from, operators need to wield their collective energies to ensure that there is a mix of vendors of all scales, by insisting on open interfaces and real interoperability in networks, and by encouraging small developers, not just in phone apps but deep in the heart of the network as well. This way we’ll continue to see the sort of innovation that drives our industry forwards, alongside the benefits that come from vendors with a global reach.

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