The People’s Operator’s CEO has claimed that operator owned MVNOs damage UK wholesale competition.
Speaking to Mobile, Mark Epstein explained that as things stand, independent players in the market are being hurt by MVNOs that are backed by network investment.
His comments come as the takeover of O2 by Three owners CK Hutchison was rejected by the European Commission, who cited the impact on wholesale as one reason for the block. Epstein has urged the Euro watchdog to do more and level the commercial playing field for all MVNOs.
‘If you have too many MVNOs owned by carriers they barely have a wholesale bill, is that really an MVNO? They’re not playing on real commercial terms,’ he said. ‘It’s just another brand of the network so carriers pick up any extra cost and that’s damaging to real MVNOs. If you’re owned by a network, you have massive access to cash and could undercut real MVNOs. When it comes to the merger that’s what the regulator needs to keep an eye on.
‘TPO is a standalone MVNO and are independent’, he said, ‘we need more people like us providing competition. It took a long time just to get 4G and if you want MVNOs to flourish the environment needs to be right.
‘I hope that the Three/O2 merger helps competition in the UK. It’s healthy to have a vibrant MVNO market and it’s important that the regulator ensures that fair commercial terms are delivered to MVNOs at a timely manner so we can continue to compete.’
Calling for change
While largely pleased with the Euro watchdog’s decision, a number of industry players have expressed disappointment that those involved in the merger missed the opportunity to fix the UK wholesale space.
In particular The Phone Co-op has said the Hutch’s remedies did not go far enough to tackle issues for MVNOs. CEO Vivian Woodell has previously urged Hutch to not walk away from the deal, claiming that it has the chance to open up the wholesale market.
The Federation of Communications Services (FCS) echoed Woodell’s call for reform. CEO Chris Pateman who praised the EC’s tough stance on the Three/O2 merger but said that it needs to be reflected in the wider UK market.