Michael Richardson
Regulatory Policy Directorate
Oftel
50 Ludgate Hill
London EC4M 7JJ

28 September 1999

Pre-pay services and the regulatory framework
1 SPIG welcomes Oftel's consideration of the mobile pre-pay market in its consultation document issued in July 1999 and is pleased to have the opportunity to comment. Pre-pay is an essential element of the whole mobile market. SPIG is particularly concerned about the opportunities for independent SPs to participate in any telecommunications market on equal terms with the Tied SPs of the mobile operators. In addition it looks to Oftel to police the operator licences effectively.

2 Those of our members, who are mobile independent service providers, MISPs, report that none of them has access to prepay from any of the mobile operators including Cellnet and Vodafone, who are obliged by their licences to sell wholesale airtime to service providers on non-discriminatory terms. Several had requested access to prepay in the first 18 months of its availability. All were refused. This has lead to complaints to Oftel, none of which have been resolved to date. Although Cellnet and Vodafone have now announced their intention to provide a wholesale service to MISPs, this falls short of our members' requirements for unbundled pre-pay functionality.

3 In addition where MISPs have been acting as distributors for prepay product they report that there has been discrimination in distribution by the operators. In the period up to Christmas 1998, when the popularity of pre-pay exceeded demand for handsets, independent distributors were denied their share. This has been exacerbated in recent weeks. By supplying to the supermarkets at lower differential prices, neither independent distributors nor independent retailers can compete on price to the general public.

4 SPIG members concur with the views expressed by one of our members, Cellcom Ltd, in its response to the pre-pay consultation document:

-	We believe MISPs should have access to pre-pay services in order to increase the competitive offerings to customers;
-	The access required should enable MISPs to have their own tariffs;
-	The network design needs to permit MISP access to pre-pay functionality;
-	Real time billing and access to network databases should be available on the same basis for MISPs and the operators' Direct Business and Tied SPs;
-	SIM locking and otherwise preventing a handset from being used on another network is inherently anti-competitive as it prevents customers from moving to another service.

5 In order to facilitate access by MISPs to pre-pay functionality, SPIG recommends that a task group is set up within the NICC to develop a functional specification.

Yours sincerely

 

Phil Sayer
SPIG Chairman