Regulatory framework gets easier for mobile operators

The new EU-wide regulatory framework came into effect on 25th July this year. David Edmonds, Director General of Telecommunications explained at the time that:

"...the new framework requires Oftel's actions to be consistent, proportionate and targeted only at cases where intervention is required. National regulators will work together to establish common approaches and remedies for regulation.

"Oftel is currently carrying out a series of market reviews under the new Directives, and until this work is complete in the autumn, current regulation that applies to specific companies will remain in place."

One of these market reviews related to the wholesale market for access and call origination on public mobile telephony networks in the UK. It found that there was sufficient competition to make the existing sector-specific regulation redundant.

Mobile network access enables users to call and be called on a mobile telephone, while call origination is the use of the network's capacity to make outgoing calls. There are four 2G operators of mobile telephony networks in the UK supplying access and call origination: Vodafone, O2 (formerly BT Cellnet), T-Mobile and Orange.

Oftel found that competition on this market was effective and that no network operator had individually or jointly significant market power (SMP). No one supplier has a significant market share lead over its competitors or any significant cost, technological, or other competitive advantage. Further, Oftel concluded that there is no joint SMP (collective dominance), on the basis of significant fluctuations in relative market shares, fluctuating relative prices, retailers' countervailing buying power, and continuing entry into the retail market by service providers.

In terms of the new framework, once such a finding is made it must be notified to the Commission - to allow the Commission and other national regulatory authorities to make comments and recommendations. The finding was notified on 4th August, and the Commission responded on 29th August, concurring with Oftel's view.

Competition Commissioner Mario Monti said: "I am pleased that the new regulatory framework functions and that national regulators take the opportunity to repeal sector regulation that is no longer needed."

According to a Commission report of the decision, Oftel now intends to withdraw certain regulatory obligations on Vodafone and O2.