Ofcom has been told to step in and fix the UK MVNO market, after the Post Office became the latest virtual player to exit the space.
The Post Office’s decision to shut down its mobile business makes it the most recent industry casualty after Sainsbury’s canned its joint venture MVNO with Vodafone earlier this year.
Speaking to Mobile, Phone Co-op CEO Vivian Woodell expressed concerns that the number of ‘MVNO corpses’ inthe market will significantly affect whether new players enter the space.
He said: ‘The problem with Sainsbury’s exiting the market – and now the Post Office – is that if you want a thriving MVNO market you don't want a lot of corpses in the space where it looks like others would not want to enter. The Post Office leaving the MVNO market is evidence that there is a problem, and the balance in the market is not very favourable to virtual networks.’
Originally run on the EE network using virtual network enabler Transatel, Post Office Mobile shut down its mobile venture due to a lack of marketing budget. Transatel CEO Jacques Bonifay confirmed the news to Mobile: ‘The Post Office was working well, and initially it was distributing the offering in a few shops. It didn’t have budget to balance the business and the Board decided that this was not the right time to invest because of its overall global strategy.’
Post Office Mobile’s entrance into the market was delayed for almost a year, which the firm’s head of mobile Geoff Smyth attributed at the time to 4G access on EE. He explained that, had the brand launched on time, it would not have been able to offer 4G to its customers, a feature the MVNO felt it was worth waiting for.
The network’s 4G access has also come under fire from partner Transatel. CEO Jacques Bonifay recently called out networks that charge MVNOs a premium for faster connectivity, claiming it took Transatel ‘far too long’ to get 4G access with EE.
Responding to the claims, an EE spokesperson said: ‘We support a rich and broad group of MVNOpartners, with more than 30 MVNOs supporting more than 5m customers on our network. These partners have a variety of propositions and business models that we support through services such as 4G and unified communications.’
According to Woodell, the issue of rolling out 4G to MVNOs is a major problem across the industry, one which he claims shows clear evidence that virtual networks are not given fair terms in the UK.‘This is evidence that the market isn’t very open or fair for MVNOs to thrive,’ he said. ‘In France the regulator said networks had to offer 4G to MVNOs.
'In the UK we need similar regulation so that MVNOs can be given a fair chance instead of the network deciding what they do. The regulator needs to step in at EU level so that it can be implemented nationally. Ofcom can step in and end it tomorrow but it declined to do that.’
Responding to Woodell’s comments, an Ofcom spokesperson said: ‘Ofcom is committed to ensuringthe UK mobile market delivers innovation, investment and competitive prices to benefit consumers. The UK has one of the most vibrant and competitive mobile markets in Europe, and some of thelowest prices, with nearly 30 ‘virtual’ operators competing for retail customers.’