Mobile operators ordered to open up networks to rivals


9 Feb 2004

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Comms Minister Dermot Ahern TD has ordered Vodafone and O2 to open up their mobile networks to competitors.

Ahern is understood to have issued draft policy directions on the market and fixed line rental. There will be a 21-day consultation period for the general public to voice concerns and observations as well as the industry. Ahern said the aim of the move was to bring other mobile companies in to the market.

On RTE radio this morning Danuta Gray, CEO of O2, said that mobile competition in Ireland was already competitive and that O2 was inundated with requests from other operators seeking to gain access to its network. Gray acknowledged that mobile prices would be lower with five or six players in the market but said she was not afraid of competition.

The move by Ahern follows a consultation with ComReg which said that it found the Irish market for mobile phone services to have one of the highest concentrations in the EU, with the two leading operators O2 and Vodafone having 95pc of customers between them.

ComReg has proposed that both Vodafone and O2 will be designated as having significant market power and as such will be obliged to allow other mobile operators access to their networks.

The regulator’s consultation found that the prices of the two main operators have not changed significantly following the arrival of Meteor into the market, with the two main operators having significantly higher average revenue per user (ARPU) rates.

UPDATE

Minister Ahern said: “I am directing ComReg to use its powers to mandate mobile phone companies to open up their networks to other Irish and international mobile phone companies. This move will provide all the three licensed mobile phone operators with nationwide coverage and equal opportunity to compete and drive down mobile phone prices.

“I am also directing ComReg to minimise cross-border roaming and other charges for businesses and consumers living close to the border. Businesses in border regions incur additional charges and higher per minute tariffs rates from mobile phone companies in order to avail of all-island tariffs. This puts businesses in border areas at a competitive disadvantage with the rest of the country.”

As well as rounding on the mobile industry, Ahern reaffirmed his commitment to ComReg introducing a single billing line rental product by March. “I am also directing ComReg to introduce, by March 31st, a single billing wholesale line rental product for voice and data. I am directing ComReg to ensure that this product can be provided at rates which will drive competition.

“This move will have two practical benefits for consumers. First, it will mean that all telecoms companies will be able to offer a single billing product to consumers. This should lead to competition and lower prices for consumers. Secondly, it will mean that consumers who chose to switch to a new, cheaper, telecoms company, will only receive a single bill from that company. At present consumers receive a line rental bill from Eircom, as well as a bill for phone calls from their new company.”

Ahern said that the overall aim of these policy directions is to drive competition, cut prices and deliver value for money services to Irish consumers. The Minister is also issuing a draft General Policy Direction to ComReg, which specifies clearly that the promotion of competition is to be their key objective. This will cover areas such as market share of new entrants, price margins that will promote competition, competition in the fixed and mobile markets and the possibility of incentivising new technology platforms in the marketplace.

By John Kennedy