MVNOs not the answer,
says Meteor

4 Apr 2005

In a dramatic move away from its traditional pay-as-you-go model Meteor has decided to enter the bill-pay market and has established a retail agreement with Carphone Warehouse. The company also called on the Commission for Communications Regulation (ComReg) to review its decision to pave the way for mobile virtual network operators (MVNOs).

Meteor said it will be targeting residential and business customers with the new service. Carphone Warehouse will be the first retailer to come on line and will offer bill-paying services from today.

Meteor added that other major retailers and independent dealers will launch Meteor’s bill-pay products and connection service over the next few weeks as it completes a programme of substantial investment in systems and training. This is in addition to Meteor’s expansion of its own retail store network throughout the country beginning with the opening this month of the new store in Grafton Street in Dublin.

On a like-with-like basis business and personal customers who pay a monthly bill will be offered savings of more than 30pc on calls, the company said. Meteor handsets with Carphone Warehouse include the high-end business Nokia 6230 free of charge and savings of up to €200 on the Motorola V3 Razor phone.

“This is what ComReg, the Oireachtas Committee on Communications and high-usage consumers have all been asking for,” said Meteor’s director of corporate affairs Andrew Kelly, “and we have no doubt that it will have a major competitive impact on the market and [it will] drive down monthly call charges.”

On the subject of MVNOs, Kelly said: “A ComReg mandate to force MVNO access to the Vodafone and O2 networks is not the solution to the lack of competition in the bill-pay market.

“MVNOs typically offer prepay services and they don’t invest in the infrastructure such as billing systems that would allow them to compete in the bill-pay market. In any event, allowing for appeals, commercial negotiation and regulatory intervention, the launch of any MVNO on Vodafone or O2 is still quite some time away”.

Kelly said that these new bill-pay distribution channels, added to a roaming deal that gives the company national coverage, means that Meteor is now competing on a level playing field with Vodafone and O2 with immediate benefits for bill-pay customers.

“We would hope that ComReg would welcome this development as it brings strong competition exactly where the regulator has said it is needed”, Kelly said.

Referring to a letter signed by the President of the European Commission, José Manuel Barroso, Kelly said that ComReg has been asked to monitor developments in the market very closely in the near future.

Noting that as a result of its national roaming deal Meteor “could now be in a position to attract a larger proportion of customers than anticipated in ComReg’s analysis”, a European Commission letter said.

It also added that if Meteor “proves capable of gaining retail market share, including in the postpaid segment, rapidly and at the expense of Vodafone and O2, one of the criteria that currently imply collusive behaviour by these two operators may no longer be met”.

“88,000 new subscribers and growth to 9pc market share in a quarter when the overall market had major growth with penetration rising by 6pc is clear evidence of a competitive constraint on Vodafone and O2.

“We have set about making the same impact in the business and personal bill-pay market segments and we call on ComReg to review its findings in recognition of the changing market dynamics and regulate in a manner that supports competition where it is needed,” Kelly said.

By John Kennedy