TelecomFinance Conference 2015’s Regulation & Competition panel prompted a heated debate among operators and regulators about the pros and cons of over-regulating the telecoms markets. Jan Willem van den Bos, a partner at law firm Dentons, who was…
TelecomFinance Conference 2015’s Regulation & Competition panel prompted a heated debate among operators and regulators about the pros and cons of over-regulating the telecoms markets.
Jan Willem van den Bos, a partner at law firm Dentons, who was moderating the debate, suggested that regulation is currently driven by M&A moves, and asked panellists whether consolidation should be feared or embraced.
Lynne Dorward, executive director, regulatory affairs at Qatar-based telecoms group Ooredoo, argued that outside the EU, regulators should fully support consolidation.
She pointed out that in a number of Asian and African countries, there are more than four licences.
“When we have too many small players, the customers are actually not getting the best service and are not getting the best prices,” she noted.
Dorward also pointed to some African markets where, she believed, there are a few operators that are disrupting the industry and offering below-cost services to position themselves for a takeover. “If they are not acquired, in some cases they go bankrupt”, she said.
She opposed interventionist policies, arguing that competition authorities should only step in if issues arise during a takeover process, but not in anticipation of these, as, she claimed, it has often happened so far.
According to Peter Stephens, partner and global head for telecoms and media investments at Virgin Management, in some Latin American countries, the fourth operator is only “nominal” and is not really competing.
Therefore, he argued that three operators would be enough to ensure competition in these countries.
The regulators play a very important role in getting the balance right, he said.
Enrique Medina Malo, chief public policy officer at Telefonica, which is Virgin’s MVNO partner in Brazil and Mexico, said the Spanish operator is looking to drastically reduce its European footprint while scaling up its presence across Latin America.
He welcomed AT&T’s recent entry into Mexico via the acquisition of Nextel and Iusacell, and praised the country’s regulator, the IFT, for encouraging and supporting foreign investments.
IFT commissioner Fernando Borjon said the government is planning to use part of the main operators’ spectrum to improve competition by launching more MVNOs.
He added that Mexico’s new state-owned mobile network project, which will be built in a public-private partnership with foreign investors, will benefit all operators.
However, Ooredoo’s Dorward argued that a single network partly owned and operated by the government does not favour the creation of a fair and competitive environment.
While acknowledging that there are some challenges in the coverage of rural areas, she also stressed that a government-controlled monopoly is not the right solution. “In many countries, there are a lot of other solutions before we go down this very scary path,” she said.
Telecom Italia’s VP for relations with international institutions and organisations, Luigi Gambardella, described the new European Commission headed by Jean-Claude Juncker as “a positive change”.
“Three years ago, it was unthinkable to go from four to three operators in countries like Germany,” he noted.
He argued that consolidation is a win-win situation for both operators and consumers as it increases competition, investments and, ultimately, consumer choice.
Panellists:
- Jan Willem van den Bos, Partner, Dentons (moderator)
- Lynne Dorward, Executive Director, Regulatory Affairs, Ooredoo
- Fernando Borjon, Commissioner, Instituto Federal de Telecomunicaciones de Mexico
- Luigi Gambardella, Vice President for relations with international institutions and organisations, Telecom Italia
- Enrique Medina Malo, Chief Public Policy Officer, Telefonica
- Peter Stephens, Partner and Global Head for telecoms and media investments, Virgin Management
