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MVNO Monday: a guide to the week’s virtual operator developments

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6 Feb 2017

Emirates Integrated Telecommunications Company (EITC), the holding company of United Arab Emirates (UAE) fixed and mobile operator Du, has licensed the Virgin Mobile name from Richard Branson’s Virgin Group and plans to set up a sub-brand operation ‘within weeks’. A report from Reuters says that EITC has licensed the Virgin Mobile moniker for five years, giving it full rights to ownership, management and operation of the brand in the UAE. The new Virgin Mobile operation will focus on the consumer market rather than businesses, and will not compete head-to-head with Du, EITC says. This will be the third Virgin-branded mobile service in the Middle East, following similar licensing deals with operators in Saudi Arabia and Qatar, although Ooredoo’s Qatar-based sub-brand was forced to close down in August 2011 after only 15 months in operation.

Meanwhile, Virgin looks set to enter another new market in the near future, specifically Ecuador. Local telecoms watchdog Agency for Regulation & Control of Telecommunications (Arcotel) issued an MVNO concession to Tribemobile Ecuador Tribemosa – a subsidiary of Virgin Mobile Latin America on 9 December 2016. According to local press reports, the new MVNO could launch as soon as 2H17, although a concrete wholesale agreement has yet to be agreed. As expected, given tie-ups in other Latin American markets, primary negotiations are said to be underway with Telefonica-backed Movistar, although company officials have refused to rule out an alternative partner.

In Spain, Grupo MASMOVIL has struck a deal to acquire international-focused MVNO LlamaYA Movil, a virtual operator specialized in international calls, for EUR29.7 million (USD32.0 million), which could rise to EUR41.7 million subject to the completion of certain closing conditions. LlamaYA Movil was founded back in 2009, with a view to targeting customers with family located in Central America. According to a filing with the Mercado Alternativo Bursatil (MAB), LlamaYA presides over a user base of around 170,000.

Slovenian VoIP provider SoftNET has reportedly entered the country’s MVNO sector, piggybacking on the Telekom Slovenije network. The virtual operator supports 4G LTE access from launch. Going forward, the telco seeks to expand its MVNO offering to its other markets, which include Croatia, Bosnia & Herzegovina and Serbia.

Japan Communications (JCI) has announced that it has signed an interconnection agreement with SoftBank, ahead of an expansion of its existing MVNO service on 22 March 2017. JCI, which now offers coverage via the networks of both NTT DOCOMO and SoftBank, claims it will be the first interconnection-based MVNO to provide a service using the SoftBank network. JCI’s press release notes that it first requested access to the SoftBank network on 7 August 2015, but the lack of progress saw it raise the matter with the Ministry of Internal Affairs and Communications (MIC) on 29 September 2016. The MIC handed down its judgement on 27 January 2017, forcing SoftBank’s hand with a Ministerial Order.

Elsewhere in Asia, TOT of Thailand has terminated its 2100MHz 3G wholesale contract with M Consult Asia (3G Mojo), with a ‘high-ranking source’ at the telco informing the Bangkok Post that the reseller owes more than THB10 million (USD284,341), and has no intention of repaying its debt. The debt includes a numbering fee at THB1 per month per mobile number; the rental cost of its IT backup system; and the cost of management services. In a parallel development, the source notes that TOT is also expected to terminate its contract with Samart I-Mobile (SIM), which currently owes the telco THB80 million. M Consult Asia is expected to jump ship and take up an alternative wholesale deal with CAT Telecom, while SIM is already in the process of switching between networks. The source claims that M Consult Asia currently presides over a user base of 600,000, while SIM’s user base stands at around 300,000. Both subscriber figures remain unverified.

Finally, Brussels-based industry body MVNO Europe has weighed in on the recent decision by EU lawmakers and member states regarding the level of caps for wholesale roaming charges in other EU member states, with MVNO Europe vice president Innocenzo Genna stating: ‘European citizens expect the end of the roaming surcharges to happen without losing competitive tariffs and innovative offers: by contrast, with the present deal on wholesale caps, they will be heavily disappointed.’ MVNO Europe asserts that, with excessive wholesale roaming charges, dominant mobile operators will be the only ones to drive the market, adding barriers for smaller players, such as MVNOs.

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