False premise
If telcos are going to avoid becoming bit-pipes with razor-thin margins, they desperately need to innovate beyond outbidding each other for scant radio spectrum
The days of the UMTS spectrum auction are long gone as is thus the "outbidding each other". Infrastructure co-operation both between operators and manufacturers has become the norm in Europe in the last few years. And networks are continuing to make profits.
This doesn't mean that they don't have to change their business model. Obviously, LTE makes no distinction between voice and data, which is the big change from UMTS and GSM, so it becomes very hard to prevent OTT like VoIP, although the licence terms are probably the determining factor there. What networks want to be is a customer's preferred (VoIP) provider largely because this allows for the most efficient use of resources from within the network. This can easily be achieved through a different tariff structure that makes calls via the network as attractive as competing VoIP - networks. Messaging is probably more of a challenge because it has been 100% profit all this time, but it's still doable. Using the peering billing structure already in place networks can squeeze out non-networks or encourage them to partner with them for a revenue share. As the advantage of using VoIP / instant messaging instead of network services declines, so does the business model. This has already largely happened in fixed line services with countrywide flatrates, etc.
As it's all IP-based LTE also offers the networks plenty of scope for product differentiation with QoS: sell bandwidth instead of data volume, offer messaging only services, limited call minutes, etc. In fact it's possibly only the regulatory guaranteed revenues that have prevented these kinds offers: networks have been more or less obliged to avoid innovation offer extortionate tariffs to maximise returns for shareholders. Though quoted in the article as an apparently negative example. 3 is a good example of attracting people through its data tariff and still being able to charge them a premium for voice services.