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

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8 Feb 2021

Attorneys general representing 16 states and the District of Columbia have sent a letter to the US Federal Communications Commission (FCC) urging the agency to request additional information from Verizon about its planned acquisition of TracFone Wireless. The correspondence explains: ‘Of particular concern is Lifeline. Lifeline plays a vital role in our economy by providing essential communications services to millions of low-income Americans. TracFone is one of the largest providers of Lifeline services with approximately 1.7 million low-income subscribers in 43 states and the District of Columbia. By contrast, Verizon only offers its mobile services to Lifeline customers in parts of four states. The potential for Verizon to pursue additional profits by reducing the access and/or quality of Lifeline services could shut out millions of low-income Americans from adequate communications services. Considering the fundamental role that cellular telephones play in accessing modern society and the modern economy, it is imperative that Lifeline services be protected and maintained if this transaction is approved.’ The takeover deal – valued at USD6.25 billion – was unveiled in September 2020 and is expected to close in the second half of 2021.

Kenyan online payments company Jambo Pay, which is owned by Web Tribe, has been awarded an MVNO licence by the Communications Authority of Kenya (CA). Jambo Pay CEO Danson Muchemi told Business Daily Africa that the newcomer will initially target the IoT segment, with an initial focus on smart meters and vehicle tracking. A commercial launch expected to take place in Nairobi in H2 2021 following investment of around KES300 million (USD2.7 million).

Saudi Arabia’s Communications and Information Technology Commission (CITC) has reportedly awarded MVNO concessions to Integrated Communications Company and The Federation of Technology Resources. The licensees each have 90 days to fulfil the legal requirements set out in their licensing documents, otherwise the concessions will be revoked and awarded to alternative bidders. The companies will join Virgin Mobile Saudi Arabia and Jawraa Group (Lebara Mobile Saudi Arabia) in the Saudi MVNO sector. The original pair were awarded licences in 2013 and received finalised MVNO authorisations in Q1 2014, both going on to launch in 2H14.

French cloud/telecoms operator Adista, which is backed by investment firm Equistone, has signed a contract to acquire fellow B2B player Waycom. The latter offers a full suite of telecoms products, including a mobile service, which is delivered via the networks of Orange, SFR and Bouygues Telecom. The transaction is expected to be finalised in early March, and will create the fourth largest B2B telco in France, behind Orange, SFR and Bouygues.

Itelecom, Vietnam’s first MVNO, has indicated that it passed the one million subscriber milestone at end-December 2020. Tuoitre.vn quotes the operator’s general director, Mr. Nguyen Hoang Hai, as saying that 2021 will see the MVNO seek to improve customer experience by reconfiguring itself as a digital service provider.

The Telegraph reports that O2 UK is close to an agreement with Sky to extend the pay-TV giant’s mobile wholesale deal as it aims to convince competition watchdogs that its pending merger with Virgin Media will not harm competition. Sky Mobile has attracted more than 1.5 million customers since its launch in 2016, the report notes.

Finally, Drillisch Online, a subsidiary of 1&1 Drillisch, says it has received a verdict in the arbitration proceedings regarding Price Review 1 under its existing Mobile Bitstream Access (MBA) MVNO agreement with Telefonica Deutschland. The arbitral tribunal dismissed the action brought by 1&1 Drillisch challenging the expert’s rejection of its application for the advance service prices to be reduced retroactively from September 2017. The arbitral tribunal takes the view that the expert opinion is valid. In the ongoing Price Reviews 2, 5 and 6 1&1 Drillisch maintains that advance service prices under the MBA MVNO agreement have to be reduced retroactively. These proceedings concern different effective dates since July 2018 and are independent of the outcome of the arbitration proceedings in Price Review 1.

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