Vodafone puts heat on ComReg

28 Jan 2004

Relations between the Office of the Communications Regulator (ComReg) and Ireland’s biggest mobile operator have sunk to a new low with Vodafone strongly rejecting ComReg’s analysis of the Irish market contained in its Preliminary Market Analysis released yesterday and accusing it of a power grab.

In a statement Vodafone said that it told ComReg it would “not accept this ill considered analysis” and would be responding fully to the report, which it dubbed “incomplete”.

Paul Donovan, chief executive, Vodafone, commented, “There are a number of fundamental flaws with this report and it is our belief that ComReg are skipping over issues of fundamental analysis to arrive at an outcome that they want – increased regulation and more power for their office.

“Essentially, ComReg is suggesting that the Irish mobile market is static. This is nonsense: we compete intensely for every customer in this market. We are beating O2 in the contract market despite their aggressive marketing campaign to target that sector while Meteor have made strides in the pre-paid market.

“As regards impact of competition, just two weeks ago the CSO indicated that declining mobile prices resulted in downward pressure on inflation, in addition to this there are a number of strong new entrants waiting in the wings, all conveniently ignored by ComReg.

“Talk of collective dominance or a lack of competition is completely outrageous but don’t just take our word for it – the European Commission does not see this market satisfying the basic criteria necessary to warrant regulation so it is very surprising that ComReg thinks otherwise,” added Donovan.

The company statement added that Vodafone considered ComReg’s allegation of ‘collective dominance’ to be “very serious and completely without foundation”.

Collective dominance says that in stable markets operators can anticipate other operator’s actions such that they act in parallel rather than actively competing and that collectively the jointly dominant operators enjoy a position equivalent to dominance. The market situation was seen as so grave that no European regulator had ever accused a regulated company of orchestrating it, Vodafone’s statement claimed.

The document also accused ComReg of singling it out for special attention: because Vodafone had been accused to being party to ‘collective dominance’ meant it would effectively be seen as a test case that would be closely monitored by other European countries.

The statement concluded by reiterating a number of previously argued points: that Irish mobile users enjoy some of the lowest call rates in Europe; that the Irish mobile market was dynamic and competitive; and that Vodafone was adding thousands of subscribers every quarter due to its services and technological development.

By Brian Skelly