How can creating fewer MNOs bring more competition?It seems that the UK’s Vodafone isn’t going to take proposals by Neelie Kroes, the European Commissioner responsible for telecoms regulation, lying down. It is arguing that attempts to dispose of mobile roaming charges within the EU (a great vote winner, of course) could lead to reduced competition. There’s also the great myth that there are only four mobile network operators in the USA – which is why the USA has overtaken the UK in terms of cellular development. There are, in fact, circa 30 operators in the United States and that’s not including MVNOs (Mobile Virtual network Operators).
The proposed new EU rules would offer incentives for MNOs to abandon roaming charges by July 2016 by allowing them to form cross-border partnerships.
In other words, encouraging consolidation amongst MNOs operating in Europe.
That’s because Brussels is perpetuating the myth that the USA’s cellular industry is much stronger than Europe’s because there are only four US mobile operators. [There are four major operators but plenty of minor ones.]
It’s obviously nonsense. There are, in fact, about thirty. If you want to come up with a definitive list, GoMo News suggests you visit the American CTIA (trade association) web site here and compare it to the GSMA’s list of GSM networks in the USA here . We’ve spotted some that aren’t listed by the CTIA as members.
A report in the UK’s Sunday Telegraph here quotes a Vodafone spokesperson as saying, “Vodafone is not resisting roaming alliances. We have long experience of working with other mobile operators in relation to roaming and network sharing.”
“We are merely pointing out that another part of the EC responsible for European competition law will need to consider whether alliances might be anti-competitive and potentially therefore illegal.”
“We, like any other operator, are keen to understand the legal position before making any commitments that may mislead our customers and prove legally unworkable.”
Vodafone’s arguments strike us here at GoMo News as being entirely sound and not “naked self-interest” as they have been painted.
If you are going to penalise those who don’t form cross-border alliances (and, in effect, consolidate), then you are clearly creating a situation where there will be fewer MNOs.
That will, in turn, lessen competition. Hence, Vodafone points out that such behaviour by MNOs might therefore be illegal under the EU’s strong laws about anti-competitive behaviour.
As one Sunday Telegraph reader quite rightly suggests – if you are going to remove the cost of roaming in the EU completely, the net result will be that the cost of home calls will go up. Simples.