Vodafone Qatar plans legal action over Virgin “MVNO”

Vodafone Qatar chief plans legal action over deal between Qtel and Virgin Mobile

Tags: QatarQatar TelecomVirgin Mobile Qatar (www.virginmobile.com.qa)Vodafone QatarictQATAR (www.ict.gov.qa)
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Vodafone Qatar plans legal action over Virgin “MVNO” Vodafone Qatar chief Grahame Maher considers Virgin Mobile Qatar to be an MVNO. (Khaled Termanini/ITP Images)
By  Roger Field Published  May 26, 2010

Vodafone Qatar plans to take legal action against ictQatar, the country's telecom regulator, in response to the launch of Virgin Mobile Qatar earlier this month.

Virgin Mobile, one of the world’s leading mobile virtual network operators (MVNO), launched services in Qatar on May 13, using the network of incumbent operator Qtel.

But the launch of Virgin Mobile Qatar, which is described as being a “brand licensing partnership” with Qtel, caused consternation among directors at Vodafone Qatar, the country’s second mobile operator, which started operations in July 2009.

Grahame Maher, CEO, Vodafone Qatar, told CommsMEA that he considered Virgin Mobile Qatar to be an MVNO, and that the venture was a breach of the terms of Vodafone Qatar’s licence, which stipulated that the market would remain free of additional mobile operators for a set period.

“What we think is that [Virgin Mobile Qatar] is an MVNO, or a service provider, call it what you like, and it is against the regulatory agreements and structure in Qatar, and is against the conditions that were in our licence when we agreed a $2.1 billion licence fee.
 “On that basis we will be pursuing legal action against ICT Qatar and also Qtel and Virgin,” Maher said.

“Around the world Vodafone has MVNOs and service providers that are owned, but they still have to be licenced and approved regardless of the ownership.”

Virgin Mobile Qatar already appears to have caused some confusion in the region, with various newspapers referring to the operation as an MVNO. The claim has been rejected by Qtel and Qatar’s telecom regulator, ictQatar, which posted a defensive statement on its website explaining that the country has only two licenced telecom operators.

ictQATAR stated on May 13 that “there is not a third telecommunications service provider licensed to provide fixed or mobile networks and services” in Qatar.
“Recent media reports of a third mobile operator launching services in Qatar are not accurate,” said William Fagan, assistant secretary general and executive director of the regulatory authority at ictQATAR.

“ictQATAR does not want the public in Qatar to be misled in any way about who is actually providing these services. To be clear, there is no third licensed mobile operator. There is also no licensed mobile virtual network operator.”

Fagan added that ictQATAR “does not object to licensed telecommunications operators using innovative practices to provide different products and services to the public”, suggesting this was how the organisation viewed Virgin Mobile Qatar.

But the statement did little to clarify the definition of an MVNO, and Fagan failed to respond to questions from CommsMEA on the subject. Furthermore, developments in Qatar at the end of May indicated that ictQatar also had some reservations about the status of Virgin Mobile Qatar.

According to Maher, the regulator forced some of Virgin Mobile Qatar’s retail outlets in Doha to close, although he said they were soon re-opened. “They were forced to stop by the regulator. The reason was that they had not got approval for the service and we do not know what has been agreed. Whatever the agreement, it is still a new competitor and therefore against the terms of our licence,” Maher said.

Milan Sallaba, an independent telecom consultant based in Dubai, said that at face value, most people would refer to the “brand licensing agreement” between Virgin Mobile and Qtel as an MVNO, in that it “appears to essentially be a company (Virgin Mobile) which provides a mobile phone service without owning any licensed frequency of radio spectrum”.

However, he added that an MVNO is also a company that works independently of the host operator and which can largely set its own tariff structure. “The twist here is that Virgin Mobile Qatar apparently is wholly owned by Qtel, which licensed the Virgin brand for an undisclosed sum.

“So, there is no independence at all from Qtel, and it is merely a licence agreement for a sub brand to target the youth segment, unlike an independent MVNO. So, technically, the reasoning that it is not an MVNO appears correct,” he said.

Sallaba added that it would be interesting to see the reaction of other companies keen to launch MVNOs in the region.

“I am sure there will be much scrutiny of the venture going forward as well as perusal of the regulatory framework currently in place,” he said.
ictQatar and Virgin Mobile Qatar were unavailable for comment at the time CommsMEA went to press.

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