MVNO question rumbles on

5 Sep 2007

According to Israeli newspaper Globes, the country’s three largest cellcos have hired consultancy firm LECG to advise them in their struggle against the introduction of mobile virtual network operators (MVNOs). LECG’s conclusion, based on an analysis of the market, underpins the operators’ position that there is no room for regulatory intervention for the establishment of MVNOs. LECG’s opinion contradicts that of NERA, which the Ministry of Communications hired to study competition in Israel’s cellular market and whether or not MVNOs should be introduced. In contrast to LECG, NERA recommended increasing competition in the market, and that the ministry should allow the entry of MVNOs.

LECG conducted an econometric study of the Israeli cellular market on behalf of Cellcom, Partner Communications and Pelephone. It compared the sector with EU markets, particularly those judged highly competitive by European regulators. LECG’s summary stated that average revenue per user (ARPU) in the Israeli market was fairly low, which it said was an indication of adequate competition. The consultancy firm also said that the decline in ARPU was faster than in most European countries.