3 is a significant player in the mobile industry, and Ofcom was right to control the costs associated with termination rates, a Competition Appeals Tribunal (CAT) today declared.
3 argued that as the smallest network it should not be grouped with the incumbent operators. It also claimed that it subsidised the other operators because of the imbalance in the flow of traffic off its network.
But 3's appeal suffered a setback today when the CAT ruled that the operator does in fact have ‘significant market power’, and that it should be subject to the price controls imposed by Ofcom, which it also ruled were acceptable.
There was some good news for 3, as the CAT found in favour of the operators’ assertions that Ofcom’s approach to price control was heavy handed, describing the regulators use of power as ‘misconceived’.
A further CAT judgement on the level of price controls is expected in October.
A spokesman for 3 said: ‘3 is of the view that a less intrusive form of regulation was more appropriate for later and smaller entrants.
‘Today’s judgment is only one aspect of 3's appeal and the Competition Commission is in the process of considering the appropriate approach to regulating wholesale mobile termination rates for both 3 and each of the incumbent mobile operators.’