By Johanna Somers
BRUSSELS | Thu Sep 8, 2011 3:16pm BST
BRUSSELS (Reuters) – British telecoms firm Three UK said it should be allowed to join a mobile commerce business set up in June by all its bigger rivals, or the joint venture should be scrapped.
Three UK made the proposal in a complaint to the European Commission about its exclusion from the creation of a one-stop shop for advertisers, retailers and banks involved in mobile commerce, a move it said had distorted competition.
Britain’s three largest mobile operators — Vodafone, Telefonica and Everything Everywhere — set up the joint venture. Three UK is Britain’s smallest mobile operator with a market share of 9-10 percent.
“We are asking the Commission to take a clear view of what is at stake for consumers and the dangerous precedent this move could set across Europe for the incumbents to freeze out challengers,” Stephen Lerner, general counsel and regulatory affairs director for Three UK, said.
“Instead of competing for the benefit of consumers, the three operators that hold 90 percent of the UK market have engaged in a cosy collaboration and closed ranks against competition,” Lerner said.
Competition in the British mobile market is fierce — there are 80 million subscribers in a country of 60 million people — and new entrants often complain about being excluded.
Mobile commerce products include mobile phones that can make mobile payments, credit or debit payments — a market that is expected to grow rapidly in coming years, providing a potentially vast revenue stream to providers.
Japan, South Korea and several developing countries already make wide use mobile payments and several U.S. companies have also been developing mobile commerce services.
Head of telecoms research for Espirito Santo, Will Draper, said: “I can see why they feel disappointed — the fact is that they are not a significant player in UK mobile market.”
Everything Everywhere, Telefonica and Vodafone said Three being excluded from the joint venture did not mean it would not benefit from the technology.
“Everything Everywhere, Telefonica and Vodafone felt it made sense to bring their expertise and experience together to get the venture up and running as quickly as possible, before turning to the industry for further participation,” they said.
“(We) have begun discussion with the European Commission and expect to have further discussion and make a formal submission later this year.”
The Commission said it was too early to comment on Three UK’s submission, which constitutes the earliest phase of what could lead to an antitrust investigation.
Three UK has also been battling larger operators over lowering termination rates — fees given to competitors when consumers call out of their operator’s network. The case has been looked at by Britain’s regulator, Ofcom.
(Editing by Dan Lalor)
