ComReg opens up the mobile market

damien

http://www.comreg.ie/whats_new/default.asp?ctype=5&nid=101899

ComReg proposes measures to trigger more competition in the mobile market


The Commission for Communications Regulation (ComReg) has today published its conclusions and notification to the European Commission on the Wholesale Mobile Access and Call Origination market.

Following its comprehensive analysis of the Irish mobile market, ComReg has found that the mobile operators, Vodafone and O2, have joint dominance. ComReg is proposing to open the networks of these operators to alternative service providers such as Mobile Virtual Network Operators (MVNOs).*

ComReg has also said that existing national roaming agreements between network operators should remain in place. Vodafone and O2 will be required to maintain the roaming agreements they currently have with other operators. In other European countries where further competition has been developed through the entry of MVNOs, the prices paid by consumers have fallen in some cases by up to 25%.

ComReg’s decision is based on a comprehensive analysis of the mobile market from data collated from the industry. ComReg has discussed its findings with the Competition Authority who believe that intervention in the mobile market is justified at this point.

Following the introduction of new EU communications legislation in 2003, ComReg was required by the European Commission to analyse the level of competition in this market. ComReg was required to determine whether this particular market is effectively competitive and, if not, to introduce measures to stimulate more competition.

ComReg is now notifying the EU Commission of its findings and, subject to the Commission’s approval, ComReg will implement the proposed measures for this market from January 2005.

ComReg’s analysis of the Irish mobile market concluded that:
o Irish mobile prices are high particularly in the post-paid sector;
o There has been little change in prices, particularly in the postpaid segment of the market;
o There is clear evidence that other telecoms operators want access to existing mobile networks in order to supply alternative services

Isolde Goggin, the chairperson of ComReg, said: “This has been a long and very thorough process, and we have not taken this step lightly. We have based our decision on a very comprehensive, factual analysis of the market, and our statutory responsibilities under the European telecommunications regulatory framework. We expect that there will be vociferous opposition from the major operators, but we cannot let that deter us from doing what we believe to be in the interests of competition and of Irish consumers.”

This is the main doc: http://www.comreg.ie/_fileupload/publications/ComReg04118.pdf , 103 pages of reading for Muck.

spongebob

damien.m wrote:

103 pages of reading for Muck.

Sigh ! Kompetition Spik at its densest . It will keep me regular but I simply MUST upgrade the bulb in me bog from 40w to 100w for rest of the consultation season. I do most of my best regulatory thinking on the crapper

I'll summarise it without reading it because the 'process' will apply to the BB market and the Narrowband Market presently and it is the 'process' which is of the widest interest to the regulars in here.

1. Comreg cannot interfere in a 'competitive' maket under EU rules. These rules are the set of 5 directives from 2002 that are known as the "Framework"
2. Comreg must therefore examine a given Market, Wholesale or Retail , in a holistic and comprehensive manner. The EU gave them a checklist it seems.
3. Comreg then concludes whether a market is competitive or not.
4. If not it is because of a dominant force that hinders competition or a cartel of forces such as Oh Pooh and VooDooFone . Other countries markets may be examined for comparative purposes .
5. Then Comreg can designate an operator or a cartel in this example above as having "Significant Market Power" or SMP

6. THEN COMREG MAY REGULATE THAT PARTICULAR MARKET , politely known as 'Remedies' for the lack of competition.

Chairwoman Isolde gave a speech to the Dublin Economic Forum recently where she detailed (ish) how these analyses are going, until then Comreg never gave us an overview framework document ( and still haven't formally) but seemed to barf out a consultation every few weeks or so for a while. I was quite thin at the end of it and had sores on me arse too

Consultations are divvied into two stages .

1. On the 'Market' in question

and if not competitive
.
2. Stage 2 on the remedies to the issues identified in stage 1 .

We will be going into a round of stage 2 consultations presently. Keep eating d'oul roughage Damien.

M

Slutmonkey57b

So eircom are to be given free access to mobile networks while preventing anyone acessing the local loop?

Inspirational stuff!

Note to ComReg:

The mobile market in Ireland is huge because people use mobiles in preference to the landline. You might want to examine why this is the case.
Hint: Highest line rental in europe.

BigMoose

What I dont understand is that a country with a population of around 4 million has 3 real mobile networks where as in the UK a population of some 60 million has 4 real mobile networks, people claim there is no competition. With the not too far away launch of 3 there will be a 4th real network here. How is it the competitors fault that Meteor has been crap and therefore claimed a small portion of the market? I would think that if Orange had won the licence then things would not be quite the same.

I admit that VF and O2 are probably very happy with the current situation that their mutual competitor has (at least until recently) been very poor. But that's hardly their fault. With Meteor getting their act together and 3 presumably about to make a good effort there is competition in the market.

All the players in the market signed up for their licence with known terms and paid considerable sums to build the networks. Meteor chose not to spend as much as others on their network build which shows in the service. There is a spare 3G licence that no one wants (presumably cause the market is not big enough to sustain another entrant who would have the cost of building a network). The fact that Eircom are desparate to enter the market but dont seem to be considering this spare licence shows that the cost of building networks compared to the number of subscribers they are likely to get isn't worth it. Why then should they be given a route into using other operators networks who themselves have spent the investment to build the thing? 3's licence states that MVNOs must be allowed so it will happen. Once the other operators see 3 getting the business, I am sure they will consider it themselves.

All I'm getting at is that Comreg seems to be spending a lot of time on a market that does have competition but making a total arse of the fixed situation where there clearly is not. I for one am cancelling the landline as soon as I can due to the rediculous line rental and I dont see Comreg doing anything to seriously address either the high line rental charges or the loop unbundling charges.

oscarBravo

BigMoose wrote:

What I dont understand is that a country with a population of around 4 million has 3 real mobile networks where as in the UK a population of some 60 million has 4 real mobile networks, people claim there is no competition.

Two of the existing networks have 94% market share between them. A duopoly is not effective competition. Besides, the key point you're missing is that it's the number of MVNOs in the UK that provide the real competition.

BigMoose wrote:

With the not too far away launch of 3 there will be a 4th real network here.

I'm open to correction, but aren't the coverage requirements for 3G less than onerous?

BigMoose wrote:

How is it the competitors fault that Meteor has been crap and therefore claimed a small portion of the market?

That's unfair. Meteor were delayed from market entry by a legal challenge, which left them entering an already pretty saturated market. The weekend they announced national coverage, thousands of Vodafone customers switched over - not a sign of healthy competition up to that point.

BigMoose wrote:

I admit that VF and O2 are probably very happy with the current situation that their mutual competitor has (at least until recently) been very poor. But that's hardly their fault. With Meteor getting their act together and 3 presumably about to make a good effort there is competition in the market.

There's only competition in a market when the barriers to entry are lowered. That's why MVNOs are a Good Thing.

BigMoose wrote:

All the players in the market signed up for their licence with known terms and paid considerable sums to build the networks. Meteor chose not to spend as much as others on their network build which shows in the service.

They weren't in a position to spend as much. They were entering an almost saturated market. The deal with O2 allowed them to build a customer base, which provides the cashflow that makes a network build possible.

BigMoose wrote:

There is a spare 3G licence that no one wants (presumably cause the market is not big enough to sustain another entrant who would have the cost of building a network). The fact that Eircom are desparate to enter the market but dont seem to be considering this spare licence shows that the cost of building networks compared to the number of subscribers they are likely to get isn't worth it.

3G is a bit of a dead duck at this stage. Also, the market probably doesn't need another physical network - that's true - but that doesn't mean it doesn't need new mobile phone providers.

BigMoose wrote:

Why then should they be given a route into using other operators networks who themselves have spent the investment to build the thing?

That's the old Eircom argument: if competitors are that keen to get into the Irish homes, why don't they build their own network? The answer is the same: you've had ample opportunity to milk your network, and milk it you have, so move over and let others in.[1]

There's another point that seems to be missed by the opponents of MVNOs: the hosting operator gets paid for access to their network. It's not like the MVNO gets to hitch a free ride.

BigMoose wrote:

3's licence states that MVNOs must be allowed so it will happen. Once the other operators see 3 getting the business, I am sure they will consider it themselves.

They won't consider it; they'll do it because the regulator tells them to.

BigMoose wrote:

All I'm getting at is that Comreg seems to be spending a lot of time on a market that does have competition but making a total arse of the fixed situation where there clearly is not. I for one am cancelling the landline as soon as I can due to the rediculous line rental and I dont see Comreg doing anything to seriously address either the high line rental charges or the loop unbundling charges.

Don't get me wrong: I'm not going to claim that ComReg have effectively addressed the problems in the landline market. That shouldn't, however, blind us to the lack of real competition in the mobile market.

[1] Of course, in Eircom's case there's the added twist that we paid for their network in the first place!

SkepticOne

oscarBravo wrote:

There's another point that seems to be missed by the opponents of MVNOs: the hosting operator gets paid for access to their network. It's not like the MVNO gets to hitch a free ride. They won't consider it; they'll do it because the regulator tells them to. Don't get me wrong: I'm not going to claim that ComReg have effectively addressed the problems in the landline market. That shouldn't, however, blind us to the lack of real competition in the mobile market.

The question is: will this mean real competition? The only thing I have a problem with is ComReg's line that allowing virtual operators in leads to real competition.

Whatever benefits to the consumer result from this will not be as a result of the addition of virtual operators but rather because the underlying wholesale rates which will now be regulated. But as we have seen with the line rental madness, this can work both ways.

What we will get now, is Vodafone/O2 arguing for high wholesale prices with Eircom arguing for the maintanence of a high margin between the duopoly's wholesale and retail prices. It looks like it is going to be the same crap as with the fixed line business where you have the likes of the IFA and GAA pretending to be telcos.

Blaster99

In the call market, what you're very likely to see is much more competitive international rates from mobiles and possibly much better roaming deals. And possibly better mobile-to-mobile rates too.

SkepticOne

Blaster99 wrote:

In the call market, what you're very likely to see is much more competitive international rates from mobiles and possibly much better roaming deals.

As far as international rates are concerned, this could be achieved by allowing customers to choose their international provider. There is no need for the pretense that their entire telephone service is being provided by a farmer's association.

LegacyUser

oscarBravo wrote:

That's the old Eircom argument: if competitors are that keen to get into the Irish homes, why don't they build their own network? The answer is the same: you've had ample opportunity to milk your network, and milk it you have, so move over and let others in.

I don't really get that! So you get a business idea and build it.
i.e Eircell decides to build a network

Then a few years later ComReg can just decide that your network has to be opened up for the competition?

Ok! So, Vodafone would get rental charge for the use of the network? No? They would obviously loose some subscribers to competition but gain in another business area (probably the loss would not balance with the gain).

Seems a bit unfair ..

spongebob

It seems more unfair that we pay enormous mobile call charges by Danish standards......a mobile market which is ultra competitive .

I personally look forward to DMSP and MVNO activity , The Danes are coming, see

http://www.easymobile.ie/

M

SkepticOne

Muck wrote:

It seems more unfair that we pay enormous mobile call charges by Danish standards......a mobile market which is ultra competitive .

I personally look forward to DMSP and MVNO activity , The Danes are coming, see

http://www.easymobile.ie/

Great stuff. Are we getting the Danish regulator too?

flodis79

When was the UK market opened up for MVNOs?

oscarBravo

bubby wrote:

I don't really get that! So you get a business idea and build it.
i.e Eircell decides to build a network

Then a few years later ComReg can just decide that your network has to be opened up for the competition?

That's the entire point of regulation, bubby. In a totally free market, monopolies can develop. Where there's monopoly, there's an unfair balance between business and consumer. In theory, supply and demand will address this imbalance; in practice, high barriers to entry prevent supply-side competition from taking off. In the interests of consumers, the regulator intervenes.

bubby wrote:

Ok! So, Vodafone would get rental charge for the use of the network? No?

Of course. Nobody's suggesting they should have it stolen from them.

bubby wrote:

They would obviously loose some subscribers to competition but gain in another business area (probably the loss would not balance with the gain).

Seems a bit unfair ..

Have a look at the financial results generated by the Irish divisions of O2 and Vodafone. Then look at the cost of mobile calling in Ireland versus other countries. Then tell me what's unfair.

LegacyUser

oscarBravo wrote:

high barriers to entry prevent supply-side competition from taking off. In the interests of consumers, the regulator intervenes. Of course. Nobody's suggesting they should have it stolen from them. Have a look at the financial results generated by the Irish divisions of O2 and Vodafone. Then look at the cost of mobile calling in Ireland versus other countries. Then tell me what's unfair.

Explained perfectly .. thanks. I agree with it totally!! Thanks for explaining Oscar

BigMoose

That's unfair. Meteor were delayed from market entry by a legal challenge, which left them entering an already pretty saturated market. The weekend they announced national coverage, thousands of Vodafone customers switched over - not a sign of healthy competition up to that point

.

But that's my point - the problems with Meteor were not VF or O2s fault but now there is clearly competition with Meteor yet they have (until recently) only managed 5% of the market. Is that VF and O2s fault? Meteor compete heavily on price, but only manage 5% of the market... I just dont quite understand why the fact that the true competition haven't done so well means that VF and O2 should have to open their networks up, which they paid to build under agreed licence terms.

Don't get me wrong, I would love to see lower call charges here - at least call charges in line with other countries. I would also like to be able to buy many things here priced in line with other countries. I am just not convinced the arguments for forcing MVNOs on VF and O2 hold given that Meteor is genuine, price oriented competition.

LegacyUser

I think one of the main reasons why Meteor didn't take off too well was becuase of their network. People didn't want to take the risk of having a mobile with no signal for the sake of a couple of quid. For example, business users .. company mobiles etc.

More recently, Meteor have done a deal with 02 to cover them when in areas they do not have network coverage in.

I was with Vodafone .. and once I saw that Meteor had come to an agreement with 02, I did my sums and I changed network.

Point being .. Meteor didn't take off becuase of their infrastructure .. no signal .. then purpose of having a mobile in the first place is pretty well deflated.
Fix the infrastructure .. and hey .. people start to consider them as a viable option. I've been with Meteor since September and I made twice the amound of calls .. my bill is halfed. (I dont' work in the Meteor advertising dept either).

Another 2c (I'm getting pretty poor now)

jbkenn

http://www.rte.ie/business/2004/1210/comreg.html

ComReg plan worth €150m to Eircom?

December 10, 2004 18:42

Davy Stockbrokers has predicted that Eircom stands to benefit from communications regulator ComReg's plans to trigger more competition in the Irish mobile phone market.

ComReg said on Thursday it was planning to open the networks of Vodafone and O2 to outside competition in a bid to give better value to consumers.

In a note on Friday, Davy analyst Jack Gorman said it had proven difficult for Eircom to re-enter the mobile market so far through an MVNO (mobile virtual network operator) deal. An MVNO piggybacks on an existing network to offer mobile services.

Gorman said that if Eircom captured a 10% share of the market - as had happened with MVNOs in other countries - and prices fell by 25%, this would equate to revenues of around €150m.

The analyst said this would add 9% to Davy's existing forecasts for Eircom. But he pointed out that this understated the potential impact, as an MVNO presence would also enable Eircom to manage the switch from fixed to mobile phones more effectively.

jbkenn

spongebob

Right, lets look at one of the bigger Danish Discount MVNO's known in the trade as a DMSP or 'going Danish'. They have no shops , just a website ....like the VoIP carriers. Its
Telmore

Currency Calculator Here Sez That 1 Danish Kr = 13.5c 100 ore = I KR so 10 Ore = 1.35c

Prices

https://www.telmore.dk/product/prices.html

Signup Free
Sim €12.90
SMS to Danish Numbers 2.7c
Calls to Danish Numbers 10.8c minute
GPRS €1.35 1Mb

Starter Pack = SIM and Prepay minutes or sms €26.90

M

jesus_thats_gre

I can't help but wonder if this has been done to appease Eircom in someway.. Comreg has been battling with Eircom for a number of years now and have made little or no head way to the extent where we have an extremely poorly maintained, under funded and extortionately expensive landline service. Yet they have had comparitively no problems with the mobile industry over the same period. So what do they do, let Eircom off the hook..

I want to procede with a rant about how our landlines problems equate to a far bigger problem that our mobile phone costs being 20% higher than Comreg reckon they should be but I can't really be bothered.

Maybe Eircom have promised to co-operate with Comreg is they open up the mobile industry

oscarBravo

BigMoose wrote:

But that's my point - the problems with Meteor were not VF or O2s fault but now there is clearly competition with Meteor yet they have (until recently) only managed 5% of the market. Is that VF and O2s fault?

The problem with your point is that you keep talking about fault. Vodafone and O2 are not being punished for something here.

BigMoose wrote:

Meteor compete heavily on price, but only manage 5% of the market...

As you yourself said, until recently. It will be interesting to see where their market share goes.

BigMoose wrote:

I just dont quite understand why the fact that the true competition haven't done so well means that VF and O2 should have to open their networks up, which they paid to build under agreed licence terms.

You're looking at it exclusively from the perspective of the two main mobile operators. Most of us are looking at it from a consumer perspective. Yes, the existing operators paid for their networks - it's not like they've lost money on the deal since, is it?

BigMoose wrote:

Don't get me wrong, I would love to see lower call charges here - at least call charges in line with other countries. I would also like to be able to buy many things here priced in line with other countries. I am just not convinced the arguments for forcing MVNOs on VF and O2 hold given that Meteor is genuine, price oriented competition.

How would you suggest the regulator create a climate for lower prices, if not through MVNOs?

Mr_Man

to see O2 and Vodaphone taking lessons from Eircom's strategy book on how to delay and frustrate new entrants, to keep Eircom out of the mobile market for as long as possible.

Naturally the lawyers will be the main ones to benefit from this, and I doubt that when the struggle is over that the much abused Irish Consumer will see much improvement from the introduction of MVNO's.

Just my 2c

M.

eircomtribunal

There's a piece of text, meant for a ComWreck blog that never made it, about the mobile phone situation in Austria.
Perhaps we should look at this country, if we want to improve our mobile lot?


"Myself, I am just back from a secretive and investigative visit to the Continent. Austria to be more precise. And glad no news from there reaches our shores.
Their Communications regulator's approach just does not make sense to me at all. We at ComReg get our budget from the profits of our telcos, mostly from Eircom that is. So why on earth would a regulator reduce its income by regulating effectively for the interest of the consumer? We at ComReg prefer to mislead the public with manipulated figures and paint rosy pictures of Ireland's rather grim situation.
The Austrian regulator is sitting on a success story (16% of Austrian households have broadband connections) – and he is ringing the alarm bells:
[excerpt of Austrian regulators May 2003 report]

Now look at what the Austrian regulator has achieved on the mobile phone end of things. And keep the info secret or our Joint Committee busybodies or the media might start comparing with our great little country.
Austria's eight million people have a handy penetration of 89.7 percent and the cheapest prices in Europe.
You get a 3G handset like the (Motorola UMTS-Handy A835) for 99 euro a piece, or two for 50 euros a piece - while Ireland's 3G network could not be put into place yet because the poor providers cannot source any handsets on the market.
The pricing would turn our citizens yellow with envy:
Sign up with "3" (the Hutchison crowd) and for a monthly 25 euros (reduced to 12.50 for the first 6 months) you get :
life long unlimited mobile calls to all other "3"subscribers,
99 e-mails/month,
66 min video-telephony/per month,
32 video clips/per month,
250 minutes calls to all other networks/per month.

Or go to one of the competitors and get
for a monthly subscription of 17 euros
zero cent telephony with the other 2 million subscribers of this network.

Or go to another competitor and get
for a monthly subscription of 10 euros unlimited calls within its network for 1 cent per minute."

P.