BT’s mobile takeover bid ‘a threat to consumers’
BT’s bid to take over either O2 or EE represents a major threat to consumer interests by further stifling market competition, the boss of the Phone Co-op has warned.
Vivian Woodell said customers would be left paying higher bills than they needed to if the UK’s mobile network remained in the hands of just a few big players who were also service providers.
He added that the structure of the UK’s mobile infrastructure already amounted to a ‘duopoly’ and needed urgent reform.
BT has been in talks with O2’s Spanish owner Telefonica and the parent firms of Britain’s largest mobile carrier EE about a deal valued at between £9billion and £11billion.
But Mr Woodell called on the telecoms regulator Ofcom to step in and separate the provision of infrastructure and services, in a similar way to how Openreach – BT’s infrastructure arm – was separated from the rest of the business in 2006 to provide equal access to all landline service providers.
He said mobile services were in danger of going in the opposite direction, harming consumer choice.
The Phone Co-op, which trades under brands including the Co-operative Mobile and The Co-operative Phone & Broadband and has a turnover of £10.6 million, is unique among mobile providers in being owned by its customers. In contrast to other providers, it is committed to paying the Living Wage and is part of the Fair Tax campaign to ensure firms pay their fair share of corporation tax.
It is the only UK provider to offer the Fairphone – the world’s first ‘ethical smartphone’ made from conflict-free minerals in a factory with a worker welfare fund – on contract and PAYG.
Mr Woodell said:
“The UK’s mobile network already amounts to a duopoly, because Vodafone/O2 and EE/Three share masts.
“BT’s takeover bid could mean even greater market centralisation, which can only be a bad thing for consumers.
“Currently, the big network licence holders have no incentive to let others into the market, so they will often only offer wholesale services on unattractive terms, while some simply refuse to do so at all – making it difficult for other providers to break in.
“What we need is a new regulatory framework in which anyone could enter the market for infrastructure, provided they meet the technical requirements, and any service provider could use it.
“Ofcom would also need to determine the price that infrastructure owners could charge service providers for the use of the network.
“This would have the effect of breaking the vertically-integrated structure of the industry as it is today.
“It would increase choice, open up competition and innovation, and encourage improvements in price and quality. It would also make it more economical for smaller, more local firms and even community-owned enterprises to invest in infrastructure to reduce the number of ‘not-spots’ around the country.”
Mr Woodell’s comments come just days after Spain’s Competition Supervision Authority (CNMC) ordered the main mobile network operators (MNOs) in Spain -Telefónica (Movistar), Vodafone and Orange – to ensure wholesale 4G network access for smaller providers who use their masts, known as mobile virtual network operators (MVNOs).
2. The Phone Co-op Limited
The Phone Co-op is an independent consumer co-operative based in Manchester, Chipping Norton and London. It is the only telecoms provider in the UK that is owned and run by its customers.
The Phone Co-op operates nationwide, providing fixed and mobile telecommunications services to almost 30,000 residential and business customers, including other co-operatives, charities and third sector organisations. Since 2012, when it adopted the nationally recognised co- operative brand, The Phone Co-op trades as The Co-operative Phone and Broadband, The Co-operative Business Telecoms, and The Co-operative Mobile to reflect the range of services it provides.
The Phone Co-op operates a policy of fair and transparent pricing with no hidden charges. It is committed to giving its customers the best possible service, while still promoting the wellbeing of people and communities and minimising our impact on the environment.
The Phone Co-op offers:
Low call rates – Among the cheapest domestic and international call rates – charged by the second, not rounding up to the nearest minute like many other providers.
Widespread national coverage – The Co-operative Mobile service is hosted by Everything Everywhere (EE), the UK’s largest network.
High customer satisfaction – A recent customer survey carried out by The Phone Co-op found a customer satisfaction rate of 91%, with 70% saying they pay less for their phone than with their old provider.
The Phone Co-op also has a strong commitment to ethical values:
· Owned by customers, not shareholders
· A Living Wage employer
· Member of the Fair Tax campaign of firms that are happy to pay their fair share of corporation tax. The big mobile phone networks are notorious for avoiding UK tax (see http://www.theguardian.com/business/2013/jul/31/tax-breaks-mobile-phone-networks)
· The ratio of the highest to the lowest salary is just 4. To put this in perspective, Vittorio Colao, the chief executive of Vodafone, received a remuneration package worth £8.9m this year – about 335 times the average UK wage of £26,500.
· Over £90,000 paid back in dividend to owner-members this year
· Share of profits re-invested in other co-operatives, renewable energy projects and business start-ups