After the European Commission green-lighted Three’s acquisition of O2 – with the proviso that it supports two MVNOs – cable TV and broadband player UPC has emerged as the first MVNO that will offer mobile services across Ireland.
The news is likely to be unsettling for number one mobile operator Vodafone, which says it is considering its options around mounting a legal challenge to ensure all operators receive a sufficient allocation of spectrum.
The acquisition of O2 from Telefonica will make Three the second largest operator on the island of Ireland with a combined revenue base of €736m.
Under the conditions imposed by the EU Three has committed to provide network capacity and mobile virtual network operator (MVNO) services to two MVNOs in order to facilitate new MVNO entry into Ireland. There is the option to acquire spectrum that may be taken up by one or the other to become a full network operator.
However, ComReg expressed its belief that the European Commission’s concerns over competition won’t be addressed and suggested there will be negative consequences for Irish consumers.
Yesterday Vodafone – which is embarking on a €23bn global investment programme – said the situation will be of grave concern to its investors.
“Vodafone also has significant concerns that the proposed remedies will distort healthy competition rather than preserve it, and will act as a barrier to future investment in next generation communications in Ireland,” Vodafone said.
Overnight Three CEO Robert Finnegan shot a retort at Vodafone’s remarks.
“When the dominant number one complains, you know the decision is good for competition,” Finnegan said.
“Three is not surprised at Vodafone’s response to heightened competition in the mobile market. Clearly a strong No. 2 mobile operator of scale, together with two new MVNO’s must be unsettling for Vodafone after years of unchallenged market dominance.
“Three does not accept that spectrum disparities will occur given two new market entrants will have access to up to 30pc of Three’s enlarged network capacity. Three notes that spectrum disparities were never a concern for Vodafone when it held over twice Three’s spectrum capacity over the past decade.”
UPC to enter the Irish mobile market
Events are moving pretty fast and already the first MVNO under the EU’s proposals has emerged as cable broadband operator UPC, which has been mulling an entry into the mobile space in Ireland for years now.
Under its agreement with Three, UPC intends to enter the Irish mobile market in 2015.
Magnus Ternsjo, CEO of UPC Ireland said: "This is a strategic and exciting agreement which gives UPC the opportunity to provide another extraordinary product to consumers with the launch of mobile and to become a fully-fledged quad-play services provider. Three together with their acquired O2 business will be a great mobile network partner of ours going forward"
"Our parent company Liberty Global is in the process of launching mobile services in a number of countries across Europe, and we are delighted to strike a deal that allows us to make this step in Ireland as well."
Robert Finnegan, CEO of Three Ireland added: "Today’s announcement further reinforces how Three’s acquisition of 02 Ireland will help drive competition by facilitating new entrants into the market, such as UPC.
“Three’s planned investment to develop a state-of-the art 4G network will benefit customers of Three and O2 as well as these new entrants.”
It remains to be seen if the news will force Vodafone’s hand in terms of taking legal action.
The ultimate question – and only time will tell – if the developments will correspond with much needed improvements in competition and broadband infrastructure for the Irish consumer.