17 August 2006
Vodafone's Reseller Timing Impeccable - Masters of Regulatory Gaming
The timing of its announcement regarding its heads of agreements with three mobile resellers is classic regulatory
gaming on Vodafone's part - particularly with the Commerce Commission reviewing mobile and Parliament just about to get
its teeth stuck into the Telecommunications Amendment bill.
"From Vodafone's perspective, it makes sense to foster some different brand names and share a little retail margin in
order to ward off pending regulatory changes to co-location and roaming that will facilitate real competition at a
network level," said Econet Chief Executive, Tex Edwards.
"It will also help Vodafone hide some of its two thirds market dominance and brand presence.
"We have no doubt the Commerce Commission and the policy-makers will see this for what it is - just regulatory gaming by
Vodafone to take the heat off its GSM monopoly.
"Econet wishes the new resellers all the best, but 'skinny MVNOs' or resellers aren't going to create a positive outcome
for consumers," said Edwards.
"While Vodafone continues to hold a GSM monopoly, it will continue to control the market and hand out resell deals on
its own terms. Only a third or fourth network, driving genuine price competition will generate consumer benefits and
innovation. It costs about $200m to set up a network and mobile is a $3 billion market, growing to a $4 billion by 2010
- so there is plenty of room."
"At least this illustrates Vodafone is genuinely worried. It knows consumers are fed up and it knows regulators,
policy-makers and legislators are onto its GSM monopoly. It knows it needs to pull some tricks out of the bag to avoid
regulatory changes to roaming and co-location," said Edwards.
ENDS