ComReg annuls
MVNO decision

15 Dec 2005

UPDATE: Little over a year after the Commission for Communications Regulation (ComReg) designated Vodafone and O2 as having 94pc of the Irish market between them and directed them to allow for the hosting of mobile virtual network operators (MVNOs), the decision was annulled yesterday at the Electronic Communications Appeal Panel (ECAP).

The move annuls ComReg’s designation of O2 and Vodafone as having “significant market power” (SMP) and comes within months of the regulator’s step down before the ECAP in terms of declaring that 3G operator 3 had SMP because it had its own nationwide network.

The news is certain to frustrate at least half a dozen companies that were hoping to launch MVNO services into the Irish marketplace. MVNOs – companies that offer mobile services on the back of the infrastructure of an existing mobile operator – are currently enjoying widespread success across Europe. The annulment means that operators are not to be obliged to host MVNOs but may do so at their own discretion.

Last year, ComReg chairwoman Isolde Goggins said she came to her decision following a comprehensive analysis of the Irish mobile market, which revealed postpaid mobile phone prices to be amongst the highest in Europe, revealed little change in the postpaid element of the mobile market and suggested there was clear evidence that other telecoms operators want access to existing mobile networks in order to supply alternative services.

In a statement last night ComReg said: “The decisions in relation to mobile access and call origination have been annulled by the ECAP by consent of all parties involved.

“As required by the European Commission and in light of recent developments in the Irish mobile phone market – which include the full commercial launch of the mobile operator 3, the re-entry of Eircom into the mobile market and the recent offer by ComReg of the fourth 3G mobile licence – ComReg will fulfil its obligation to monitor developments in this market.

“Accordingly, ComReg will initiate a further review of the mobile access and call origination market to determine the competitiveness of the market,” it said.

The news to annul last year’s decision was welcomed by Gerry Fahy, strategy director at Vodafone: “We’ve always maintained that the Irish mobile market is extremely competitive. Ireland already has four mobile licence holders, with another poised to enter, addressing a market of four million customers – a competitive ratio not seen anywhere else in Europe.”

Tom Hickey, chairman of alternative telecoms providers group ALTO, admitted the move is a “bombshell” for firms with MVNO ambitions but argued: “It might on the other hand free things up in terms of the operators being more willing to enter discussions with potential MVNOs now that there isn’t a regulatory decision hanging over their heads.”

However, broadband lobby group IrelandOffline said ComReg’s backing down on the matter is setting a worrying trend in terms of telecoms regulation in Ireland. He said: “Three appeals, three expensive losses, three strikes and so we wonder is ComReg out? This too is the second ECAP where it wasn’t that ComReg lost but that they changed their minds on their initial findings. There are very expensive procrastinations and have surely tarnished ComReg’s ability to analyse the markets it is charged with keeping competitive. We will however still support any decision ComReg makes to make a market more competitive and better value for consumers.”

By John Kennedy