EC Mandates MVNOs For Ireland
By Carlo Longino, Tue Jan 25 22:45:00 GMT 2005
The European Commission says two operators' 90% control of the mobile market there isn't good for competition, and it hopes to rectify the situation by forcing them to open their networks to virtual operators.
Ireland's ARPU stands at 47 euros per month, 50% higher than the European average, a product of Vodafone and O2 controlling some nine-tenths of the mobile market there. Hoping to break up this duopoly, the Irish telecoms regulator (ComReg), with the backing of the EC, plans to force the two to accept MVNOs in an attempt to lower prices and increase competition in the market. Evidently O2 and Vodafone haven't been opposed to selling wholesale airtime, but the rates they're asking are much higher than any would-be competitors want to pay.
Some of the usual suspects are rumored to be interested -- Tele2 and EasyGroup -- as well as Eircom, BT (which of course spun off O2 a few years back) and T-Mobile. O2 and Vodafone don't have a lot to look forward to: ComReg says average revenues have fallen as much as 25% in countries with MVNOs. In addition to any potential MVNOs, Hutchison Whampoa is expected to turn on its 3 network in the country later this year. If its strategies elsewhere, particularly in the UK, are anything to go by, it's going to come in very aggressively with cheap voice plans in an attempt to quickly grab market share.
Of course O2 and Vodafone say they'll appeal, and say the ruling won't do anything to help consumers, with O2 saying the move will "undermine competition" and Vodafone calling ComReg power-hungry and its analysis of the market "flawed".
The EC is showing a real willingness to put itself about in the mobile space, recently initiating an investigation into roaming charges, and this move by the EC could signal the beginning of moves into other markets, like France, where the market is dominated by three operators. While the commission might go so far as to set price ceilings for roaming charges, the removal of barriers to efficient competition will prove more beneficial to most consumers.