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GSMA Mobile World Congress: network operators accused of protectionism

Ian Grant

A rift between first and second generation mobile network operators opened at the GSMA Mobile World Congress yesterday as newcomers accused incumbents of price gouging and protectionist tactics that raised prices to consumers.

As EU ministers met in Prague to discuss the state of the telecoms market in Europe, a group of nine mobile operators accused large mobile operators of using the economic crisis to justify and strengthen their dominant positions.

The Mobile Challengers Group, led by 3 Mobile, has operations in 13 countries and 80 million customers. It said national telecoms regulatory regimes do not support consumer welfare.

"As the economic climate worsens we have noticed that some incumbent operators have threatened to increase prices following the proposed reductions in mobile termination rates (MTR)," said a spokesman for the group. "This is absolutely unacceptable and the EU should be intervening to prevent this."

He said the group believed that free competition was the best stimulant for economic growth and investment. The economic crisis should not be turned into an excuse to turn back the clock of liberalisation, he said.

He accused the large telecoms groups of doing everything possible to keep their dominant positions in the local markets of almost all member states.

They did little or nothing to develop and stimulate cross-border products even though they had operations across Europe, he said. This was evident from their "huge resistance" against the roaming regulation, he said.

He said group members had invested heavily and had successful businesses in all countries where they are present. These had changed the local markets and increased mobile usage. There was still plenty of potential in these markets and in cross-border products.

However, they were prevented from introducing such products because of "structural issues" in national and EU markets. These included the roaming wholesale market, which they said does not allow for true competition.

Regulations still allowed incumbents to charge excessive prices for terminating calls from other networks, and to consolidate their position with low rates for local customers, they said.


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