Qtel faces fine and legal action

Vodafone Qatar considers legal action against Qtel following ictQatar's ruling

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Qtel faces fine and legal action Qtel faces a fine and legal action over the way it launched its Virgin Mobile Qatar service.
By  Roger Field Published  July 28, 2010

Qatar's incumbent operator Qtel faces a potentially hefty fine and legal action from its rival, Vodafone Qatar, after the country's telecom regulator ruled that it had breached three telecom laws in the way it launched and presented its Virgin Mobile service to the public.

The regulator said that Qtel would have to pay an unspecified fine to the State of Qatar for its "unlawful actions" and referred the case to the Office of the Attorney General, who will decide the "appropriate fine".

The dispute arose in May after UK mobile brand Virgin Mobile launched in Qatar through a brand partnership agreement with Qtel.

Soon after the launch, Qatar's second operator, Vodafone Qatar, said it viewed Virgin Mobile Qatar as a third operator and a breach of its licence conditions, and said that it planned to take legal action against the regulator, ictQatar.

However, ictQatar's subsequent investigation determined that Virgin Mobile was a brand licencing agreement, and not an MVNO or third operator, but it said that the "deceptive marketing" tactics that Qtel had used implied that Virgin Mobile was a separate operator.

The regulator added that it had already asked Qtel twice to make changes to its Virgin Mobile service to "undermine the misleading nature" in which the services were launched. 

ictQatar added that more changes were required to correct the "inaccurate public perception" of the Virgin Mobile service that Qtel fostered through its misleading marketing tactics.

Vodafone Qatar's CEO, Grahame Maher, confirmed to itp.net that his company planned to take legal action against Qtel.

He said that the regulator's decision would allow Vodafone to take legal action against Qtel because of the way it had "misrepresented" its brand licencing agreement with Virgin Mobile. "I think our case is much stronger now," he said.

Maher added that regulator's decision meant that Qtel would have to make changes to the presentation of Virgin Mobile Qatar's website, and also to some of its special packages.

"The main thing is that it can only be seen that Virgin is a brand relationship and can't look like another operator. The website still looks like a Virgin Mobile website and that is not allowed," he said.

However, Qtel brushed off Vodafone's claims, and said that ictQatar's review found that Vodafone Qatar's core complaint - that Qtel's Virgin Mobile service was a third mobile service provider or MVNO - was "baseless and without foundation."

But Qtel did admit that "it could and should have" been more open about the concept behind the launch of Qtel's Virgin Mobile service in Qatar.

A spokesman for Qtel told itp.net that he did not expect to see any "operational changes" made to Virgin Mobile Qatar, and added that the "brand experience won't change for customers".

Both operators also welcomed ictQatar's decision to set clearer guidelines on how such brand licencing agreements should be presented.

"Prior to this there weren't any rules on how brand partnerships could be represented because there weren't any brand partnerships, so they have laid out rules in relation to how you market and promote brand partnerships," the spokesman said.

Vodafone paid $2.1 billion for Qatar's second mobile licence in 2007, and launched services in 2009.

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