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

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10 Apr 2017

Former Telstra director Geoff Cousins has offered to buy Virgin Mobile Australia from its owner and operator Optus. Speaking to the Australian Financial Review, Cousins confirmed that he made the bid, along with a consortium of experienced industry investors, noting: ‘I can confirm that a group of people have made an offer. They are people who know a bit about telecommunications and the Virgin business.’ No price-tag has yet been disclosed. Optus acquired a 74% stake in Virgin Mobile in 2006 for AUD100 million (USD74.9 million), of which AUD30 million was paid upfront.

US cable giant Comcast has formally launched its long-awaited MVNO unit, under the Xfinity Mobile brand name. Although it will piggyback on the Verizon Wireless network, the virtual operator will also seek to make use of Comcast’s 16 million-strong Wi-Fi hot-spot network, noting that up to 80% of smartphone data traffic in the US travels over Wi-Fi, not cellular networks. The MVNO has been in the offing since 2011, when Verizon purchased AWS-1 spectrum from Comcast, Bright House Network, Time Warner Cable (TWC) and Cox Communications (collectively known as SpectrumCo), and in return gave those companies access to its wireless network for use in a potential MVNO offering further down the line. TeleGeography notes that Xfinity is the name currently used for the cableco’s broadband services.

The Norwegian Competition Authority (Konkurranse Tilsynet) has notified Telia Company, parent of local firm Telia Norge, that the acquisition of business-to-business (B2B) service provider and MVNO Phonero has now been cleared. The watchdog asserts that Telia’s acquisition of Phonero will not result in a significant impediment to effective competition, and could lead to cost savings for end-users. As previously reported by TeleGeography’s MVNO Monday, the NOK2.30 billion (USD281 million) takeover deal was unveiled back in November 2016, only for the Competition Authority to step in on 27 February this year.

The Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ) has issued a consultation regarding the introduction of MVNOs into the Zimbabwean mobile sector, and has proposed a ‘Full MVNO’ licence fee of USD50,000. ‘Light MVNO’ concessions are provisionally priced at USD30,000, while Branded Reseller licences will cost just USD1,000. Mobile virtual network enabler (MVNE) permits, meanwhile, are expected to be priced at USD30,000. The consultation, which is open until 30 April 2017, also encompasses numbering ranges, host network agreements and interconnection.

Tele2 Russia is working with two Russian financial institutions ahead of planned MVNO launches. First up, Sberbank-Telecom, a subsidiary of Sberbank, plans to start testing MVNO services this month, reports. Limited Beta-testing will be carried out in the city of St Petersburg, initially using 100 members of Sberbank staff. Following in Sberbank’s footsteps is Tinkoff Bank, an online-only bank which eschews branches and ATMs. George Chesakov, Tinkoff Bank’s VP and Head of MVNO commented: ‘Ten years ago, we launched Tinkoff Bank, which successfully weathered the economic downturn and tough competition to evolve into Russia’s most technology-intensive bank and the world’s largest online only bank by customer base. Today, we are about to launch an MVNO in an industry that’s even more competitive. And yet, just like ten years ago, we see a new opportunity in the market to tap into.’ A commercial launch date has not yet been disclosed.

Elsewhere in the Russian MVNO sector, B2B operator MS-Spectelecom plans to launch its MVNO this autumn, reports The MVNO will piggyback on the Tele2 network, and operate in four regions (including Moscow and St Petersburg) using the cellco’s 450MHz LTE network.

Also in Russia, social networking site VKontakte, which is owned by domestic internet giant Group, has reportedly commenced testing of its own MVNO, dubbed VKmobile. The virtual operator, which was originally expected to launch last year, utilises the MegaFon network.

Finally, Chile’s Antitrust Tribunal (Tribunal de Defensa de la Libre Competencia, TDLC) has dismissed a case brought by MVNOs Netline, OPS Ingenieria and Telecomunicaciones Max against incumbent cellcos Claro Chile, Entel Chile and Movistar Chile. The trio were accused of abusing their dominant market position by failing to stick to a December 2011 Supreme Court decision which instructed the MNOs to submit a wholesale offer for MVNOs based on ‘general, uniform, objective and non-discriminatory criteria.’ In its ruling, the TDLC found that the three cellcos had, in fact, complied with the order and dismissed the case on those grounds. Further, the conditions of the offers submitted by the trio were found by the watchdog to have been sufficient for a reseller to compete effectively and therefore could not be considered to be ‘strangling margins’ or discriminatory.

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