Vodafone, O2 challenge ComReg

Mobile operator Vodafone argued yesterday that a ruling by communications industry regulator ComReg that it and O2 have a dominant position in the Irish market is flawed because the regulator gave neither company a chance to answer evidence against them.

ComReg ruled that the pair have a dominant position in the Irish market last February. If the ruling stands, ComReg could fix the price both charge for mobile calls and for giving competitors access their networks.

Vodafone and O2, who operate the biggest mobile networks in the Republic, are appealing the ruling to the Electronic Communications Appeals Panel (Ecap).

Ecap is designed to allow companies in the telecommunications industry to challenge ComReg rulings against them and has the power to overturn the regulator's decisions where it believes there are grounds for doing so.

Speaking at the hearing in Dublin yesterday, Donal O'Donnell, senior counsel for Vodafone, said that the ruling breached fair procedures and the principles of natural justice because the companies were not given a chance to answer a claim that they "tacitly colluded" with each other to keep competitors out and maintain high prices for their services.

Potential competitors to both players can enter the market in two ways. First by buying time on the national networks belonging to Vodafone and O2 at wholesale rates and reselling them to consumers. Companies who do this are known as mobile virtual network operators (MVNOs).

The second system is by completing national roaming agreements with both companies. This allows someone with an existing but incomplete network to use other networks to fill the gaps in its own infrastructure. Meteor has completed roaming agreements with the two big operators.

Mr O'Donnell told the panel that the evidence that Vodafone and O2 tacitly colluded with each other was based on claims made to ComReg by companies who wanted to establish themselves as MVNOs. They said that the existing players had unreasonably refused them access.

However, ComReg did not give either company a chance to respond to these claims because the information was given to it in confidence, and because the deadline for both operators to make their own submissions to ComReg on the issue had passed.

Mr O'Donnell pointed out that in not giving either company a chance to reply to the MVNO's claims, ComReg had ignored a basic principle of Irish law that all parties must be given a fair hearing. He said that this applied to all proceedings, whether or not they were taking place in court. Mr O'Donnell described ComReg's action in failing to do this as "extraordinary". The hearing continues.