Angry industry reaction as Vaizey applauds operators

Angry industry reaction as Vaizey applauds operators

Digital Communications minister ED Vaizey has been attacked for a Commons speech in which he said that network operators should be ‘applauded’.

Vaizey made the remarks during a debate on changes to the Digital Communications Code.

The minister told his fellow MPs that mobile operators should be ‘applauded for their achievements’ as they ‘are private companies making private investment’ and had ‘contributed some £2 billion to the Treasury’s coffers in the last 4G auction.’

The International MVNO Association (iMVNOx) was one industry organisation particularly angered by Vaizey’s remarks. Responding to the minister’s speech Frankie Spagnolo founder and director of the iMVNOx said: ‘The days of Ofcom, the Treasury and the MNOs making a 'devils bargain' to allow spectrum fees to buy the MNOs their quasi-monopolies should be long gone, but Ed Vaizey doesn't seem to have got the message.  Indeed, compared to the consumer benefits of connectivity and the benefits to the wider economy, the £2bn raised at the 4G auction is chicken feed.’

‘The fundamental problem is that the Government wants the money from the MNOs and then appears to be more than happy to wipe their hands of how these services are then executed, or, in the case of BT’s spectrum allocation, whether the services are ever deployed at all. Spectrum is a limited and extremely valuable resource.

‘Connectivity influences a country’s global relevance and GDP.  Therefore, it should be something that the politicians are consistently pushing to improve. They should never be satisfied, let alone stand on the floor at the House of Commons, pat the carriers on the back and then slip away in to the shadows, especially when there is still so much room for improvement.’

Low cost contracts and short antennas

Vaizey said that critics of the networks should also consider the low cost of mobile phone contracts and the short antennas in modern smartphones before criticising mobile coverage, he said: ‘I should also point out that one thing we never take into account when considering mobile coverage is how cheap mobile contracts are in this country compared with many other places. We also do not take into account that the modern smartphone is actually not that great at receiving telephone calls, due to its short antenna, which contributes to the difficulties that people have with calls.’

‘A recent report by the International Telecommunication Union saw the UK rise from 10th place in 2010 to fourth place in 2015 in terms of connectivity, much of which was driven by mobile coverage.’

Spagnolo however, disagrees with this assessment of the UK market pointing to the Digital Fuel Report from November 2015 by Rewheel which said the consolidation in the market meant the UK was falling behind its European rivals in mobile.

‘The UK should strive to be at the forefront of innovation,’ Spagnolo said: ‘Not sitting back and applauding the MNOs for a job 'half-done'. The Rewheel Report, which was cited in our response to the CMA’s provisional findings on the BT/EE merger, shows that in light of market consolidation the UK is already slipping down the rankings in terms of consumer pricing on connectivity.  In plain facts, that means we, as consumers, are going to continue to pay more for our services.

Spagnolo also objected to Vaizey’s comments about phone antenna’s criticizing the MP for diverting the debate on coverage: ‘Unfortunately, Mr Vaizey goes one step further than that, hiding behind Ofcom’s research on smartphones, focusing on their ability to perform their main function of transmitting a phone call, which is actually an abrogation of his responsibility and simply lets the operators off the hook. It’s also a shame that Mr. Vaizey is not aware that limited mobile phone coverage at home can be supplemented by WiFi, giving a clear advantage to any company dominant in both the supply of mobile and broadband networks.   

‘In today’s world, we all have smartphones, we all pay for our services, and we all should be able to use them, anywhere and everywhere.  We should not be required to applaud the MNOs for providing us coverage or service in places where they get the most value out of deploying their networks. Neither should we be told to accept less than adequate service just because the MNOs paid the treasury billions of dollars.  Ed seems to have forgotten that the same 2 billion pounds, which he seems so impressed by, is not a political donation from the MNOs, rather it is an investment; an investment that we, the consumers, will pay back at huge returns for carriers.  Whose side are you really on, Ed?’




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