Introduction

1. The Service Providers Interest Group, SPIG, represents the interests of businesses in the service industries that provide a significant element of telecommunications including content, data, Internet and mobile.

2. SPIG responded to the two Oftel consultations on mobile communications, Competition in the mobile market and Oftel's review of indirect access for mobile networks, in a single document in April 1999.

3. SPIG welcomes the opportunity to comment further in response to the Director General's statement, Oftel's review of the mobile market issued on 1 July 1999.

General comments

4. SPIG welcomes the balanced approach of the review and that Oftel has taken the views of independent service providers into account.

5. Oftel's assertion that the mobile market is not fully competitive shows a change of emphasis from the February 1999 consultation document and is in line with SPIG's own experience.

6. The confirmation that BTCellnet and Vodafone have Market Influence and an obligation to supply wholesale airtime to Independent SPs provides some comfort, but not the regulatory certainty that SPs were looking for if there is to be another review in 2000.

7. We believe that the detailed price monitoring structure proposed by Oftel will be a valuable step in achieving an independent view of mobile prices. Another would be an assessment of the diversity of products and services that are available.

8. While Oftel's intention to launch a formal investigation into whether network operators are unfairly cross-subsidising their own tied SPs is an important and welcome step, we seek Oftel's commitment to a specific deadline for completion and action. In our view this should be by 1 November 1999 since much information is already with Oftel. If Oftel delays beyond this, it is playing into the hands of the larger operator businesses to the detriment of independent SPs as the injured parties.

9. The introduction of mandatory Indirect Access to the Cellnet and Vodafone networks is a significant and welcome step towards introducing greater competition in the mobile market.

10. We believe that Oftel should ensure that IA should be available to any Annex II operator. Customers should not have to wait for another dispute and lengthy determination before they have access to IA brands and products.

11. We remain convinced that IA on retail minus terms will not deliver Oftel's objectives and that the cost plus formula is preferable. We urge Oftel to reconsider.

Specific comments

12. Oftel's discussion in paragraph 1.13 is inconsistent with the warm words of the Summary, since reference to competition in this section is couched in terms that refer only to the four network operators and, by inference, their branded products.

13. The nature of the wholesale product:

    Oftel's intention to narrow the scope of mobile service providers and to eliminate the reselling of branded product from regulatory control tolls the death knell for some mobile SPs companies. All current mobile SPs have invested themselves in the Cellnet and Vodafone brands over many years. If such a retrograde step were enacted, then the "transition period" would need to be at least 3 years if not 5, so that companies can reconfigure and provide certainty of continued supply to their customers.

    In order to serve their customers Independent SPs seek to provide combinations of offerings from more than one operator, who may be fixed or mobile, as well as their own value added services. In addition to the branded product currently provided, some SPs wish to become IA operators and MVNOs as well. The diversity of businesses in the independent service provider sector should not be narrowed down by regulatory whim to either those that purchase branded or those purchase unbranded airtime. The regulatory objective should be not to discriminate against any type of SP, but to embrace all, with clear obligations on PTO licensees to deal with SPs.

14. Pre-pay

    There have been many problems for independent mobile service providers and distributors with access to pre-pay service and hardware from the mobile operating companies. We shall be responding to the consultation paper that has just been released.

    We are concerned however over the delay and Oftel's handling of a complaint from one or our members on this essential issue, exposed at the Oftel SP Forum on 29 July. We believe that there are questions for Oftel to answer in its treatment of smaller telecoms businesses when they are complaining against a large company licensee.

Conclusion

15. SPIG welcomes Oftel's intention to improve competition in the provision of services in the mobile market. We will be responding separately to Oftel's consultation on Mobile Virtual Network Operators, which is another welcome proposal for increasing the diversity of supply of mobile communications products and services.

16. Independently owned Service Providers still remain to be convinced that Oftel will be able to deliver a level playing field between competing service providers within the market.

17. We see Oftel's formal investigation into network operator cross subsidy as the crucial test and its completion by 1 November 1999 essential.

18. We believe that Oftel must take the opportunity to satisfy the concerns of independent SPs over the complaints handling process.