The dictionary defines ‘differentiate” as “to see or show the differences between two or more things.”

But, when it comes to deciding which is the better mobile network, differentiation is becoming increasingly difficult. Put bluntly: how do you now choose between Vodafone, 3, T Mobile, O2 and Orange?

Rosser Reeves, the legendary American adman, stressed the importance of the ‘unique selling proposition’, or USP – the articulation of the primary reason why a product needs to be bought or is better than its competitors. At the same time he also pointed out that, to work, advertising had to be honest and that the product being sold must actually be superior, two factors sometimes forgotten by some of his successors.

In the not so distant past network coverage was perhaps the key consideration in network choice. There were, for example, parts of the country where you could get a good signal on Vodafone, but nothing at all on Orange. As a consequence, deciding which network to join was not a difficult decision.

But now, according to Global Telecoms Business, those two operators would appear to have revived their plan to “to share radio access networks for their 3G operations across the UK, with the aim of getting faster roll-out of high-speed services.” Financially this could mean an annual saving of £1 billion to Vodafone alone. The deal follows a similar agreement between Hutchison's 3 and T-Mobile in the UK. Now that they have implemented their arrangement, 3 and T-Mobile have been able to eliminate a combined total of around 5,000 base stations in those areas where there was duplication.

Consequently, before long there will be nothing to choose between either Orange and Vodafone, or T-Mobile and 3, in terms of coverage. Effectively, each of those operators is now of the opinion that they no longer need compete on coverage with at least one of their rivals. At least for the present, only O2 continues to stand alone.

Logically, of course, there could yet be further consolidation until, eventually, all operators share the same network resources. For tis to happen the financial challenge of providing universal 4G coverage, at a time when credit is almost impossible to obtain, could be a significant factor. Another might prove to be the problems implicit in getting planning permission for the necessary masts.

So, should coverage cease to be a useful differentiator, mobile operators will need to focus their proposition elsewhere.

Innovative call, text and data bundles are one option. But these are ultimately self-defeating. Because every operator can easily offer identical packages, price must inevitably become the only point of difference. Once this happens business can only be won by undercutting the competition, with bankruptcy for some the eventual outcome.

Therefore all that sensibly remains to separate the networks is handset exclusivity. And ultimately this may become the key point of difference between each.

Elsewhere on this blog Ralph de La Vega, CEO of the American AT&T Mobility and Consumer Markets, recently made the point that proprietary products such as the iPhone 3G and Blackberry Bold can launch, even in these economically troubled times, and “have people standing in line for them.” More pertinently, as he pointed out, “the iPhone provides low (customer turnover), high revenue and high loyalty and that’s good for profitability.”

Already, if you want an iPhone, you have no option but to sign with O2. Should you desire the Blackberry Storm your only choice is to deal with Vodafone.

Clearly such arrangements also make sense for the handset manufacturers. Not only can they be sure that the phone in question will be actively promoted by their chosen network, but they are likely to obtain better terms by playing one network off against the other.

Here of course lies the danger for the network operators. Bid too much for exclusivity, and all the benefits identified by Ralph de La Vega quickly cease to be so beneficial to the bottom line.

This is why Hutchison Whampoa, who own the 3 network, could yet prove smarter than the rest. By creating INQ Mobile as a wholly owned subsidiary, handset exclusivity can be guaranteed without margin having to be sacrificed. Hutchinson are also in the happy position of being able to research their own customer base to identify those gaps that a proprietary handset could fill.

Needless to say, the success of this strategy is entirely dependent on INQ creating desirable handsets. But if the iNQ 1 is any indication, so far so very good. For 3, the future may indeed be bright. But as far as network coverage is concerned, there is no way to tell Vodafone from Orange.