Slovenian cellco Vega cries foul: files complaint with regulator

24 Apr 2003

Western Wireless International-backed Vega, the newest entrant in the Slovenian mobile market which launched commercial operations in December 2001, has filed an official complaint with the industry regulator the Telecommunications, Broadcasting and Post Agency (ATRP) claiming breaches of Articles 75 and 77 of the country’s Telecoms Act. After filing the complaint, Julien Coustaury, general director of Vega, said that his company was acting ‘to ensure that Slovenian legislation is enforced and to enable competition in the mobile market’. The company claims that operators with significant market power (SMP) – and in particular the mobile arm of national PTO Telekom Slovenia, Mobitel – are acting illegally by not formulating their prices on the basis of cost, as the legislation clearly directs. Vega says the ATRP is not enforcing the law and Mobitel is being allowed to set tariffs at below cost for on-net calls (i.e. calls originating and terminating on the same mobile network) in order to retain market share. Mobitel then recoups the losses by charging highs costs for off-net calls (calls between rival networks), which impacts heavily on Vega and the country’s second largest operator Si.Mobil. By the start of 2003 Slovenia was home to some 1.749 million mobile users, of which Mobitel had a 76.3% share, or more than 1.3 million, followed by Si.Mobil and Vega on 350,600 and 64,000 respectively.

Vega’s filing follows in the wake of a recent visit from high ranking officials from the Telecommunications Directorate of the EU. Ten countries, including Slovenia, are scheduled to join in May 2004 and in order to gain entry each must have implemented certain EU legislation to open their markets and establishing independent industry regulators. However, whilst Slovenia has often been held up as a shining example of a country doing things properly, the situation on the ground is seemingly far from ideal and the ability of foreign companies to penetrate the telecoms market remains largely untested. After meeting the alternative operators in late March 2003, EU representative Paul Verhoef laid his criticism squarely at the door of the regulator, saying that it lacked the resources and experience to enable market entrants to compete on equal terms with the three Telekom Slovenia companies which enjoy de facto monopolies in their fields – Telekom Slovenia (fixed line), Mobitel (mobile) and SiOL (ISP). In his opinion, the regulator had failed to fulfil its role in opening up the market and establish competition. Verhoef went on to say that the speed with which the situation would be resolved was ‘dependent on political will’, apparently lacking at present. In the EU’s opinion the regulator must have executive power and ensure that if the national PTO is retaining its stranglehold, it is doing so legally. The ATRP now has up to ten weeks to reply to Vega’s complaint, although the operator is hopeful of a ‘swift and decisive reaction from the Agency’.

CIT’s Datafile of Eastern European Telecommunications