EU rules against Voda / 02 Irish duopoly

Let a thousand MVNOs bloom

Mobile virtual network operators look set to become a reality in Ireland as the European Commission rules in favour of ComReg's review of the mobile market.

ComReg said on Friday, 21 January that it had received notification from the European Commission saying that it agrees with the regulator's assessment of the Irish market and the "joint dominance" held by Vodafone and O2. ComReg has welcomed the Commission's ruling and said it will proceed with its measures to make the Irish mobile market more competitive.

Such measures are expected to include rules that will force O2 and Vodafone to allow other mobile operators - so-called Mobile Virtual Network Operators (MVNOs) - to piggyback on O2 and Vodafone's networks. Virtual operators are common elsewhere in Europe, with the UK's Virgin Mobile and often-cited example.

In December 2004 ComReg approached the Commission about the Irish mobile market. The regulator's review of the market concluded that Vodafone and O2 should opened up their networks to MVNOs to increase competition. Both Vodafone and O2, which together control around 94 per cent of the Irish market, reacted angrily to ComReg's suggestions and vowed to challenge the decision in the European courts.

In a strongly-worded statement Vodafone has expressed disappointment with the Commission's decision and has called on ComReg to revise its position on MVNOs, citing developments such as two new national roaming agreements, the recent improvement in Meteor's performance and the imminent entry of Hutchison-controlled 3 into Ireland, as examples of increased competition in the market.

In a statement, Gerry Fahy, strategy director at Vodafone Ireland, expressed disappointment that the European Commission has "not taken the opportunity to examine more closely ComReg's inadequate analysis and flawed conclusions".

If ComReg proceeds with its proposals, as it has said it will, Vodafone says it will be left with no choice but to appeal the decision to an Electronic Communications Appeals Panel. This could hold up the introduction of MVNOs in Ireland.

Tommy Broughan, the Labour spokesman for communications, who welcomed the Commission's decision; "It is about time the Irish mobile phone user started getting something back from companies who have been exploiting the heavy usage rates in this country."

This landmark decision by the Commission could open the floodgates in other European mobile markets where similar situations of collective dominance may exist. The regulators in the French market, for example, has long been pushing for more competition there where, only has three main players exist: France Telecom's Orange unit, Vivendi Universal's SFR unit and Bouygues Telecom. ®

© ENN

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