Qtel ordered to close Virgin Mobile Service

Qatar’s incumbent operator Qtel’s has announced that it will close down its Qtel Virgin Mobile branded services (VMS).

The developments conclude an investigation by the Qatari telecoms regulatory authority, the Supreme Council for Information and Communications Technology (ictQATAR). ictQATAR’s decision states that: “Qtel had engaged in anti-competitive conduct and an abuse of dominance”, and that Qtel had failed to comply with its previous orders requiring Qtel to correct its conduct.

The complaint about Qtel’s practices was initially brought by Vodafone Qatar, which has welcomed the announcement. Matthew Harrison-Harvey, director of legal, regulatory and external affairs, commented: “Vodafone Qatar welcomes the news of ictQATAR's decision to order Qtel to close Virgin Mobile. This decision comes after a lengthy and robust regulatory investigation and decision-making process conducted by ictQATAR.”

The initial terms of the licence granted to Vodafone Qatar in 2008 stated that there would only be two service providers in Qatar for a period of three years, leading it to challenge the legality of the VMS branding agreement.

However, Qtel and Virgin Mobile argued that the branding agreement did not amount to a third licence. When announcing the launch of the service, Virgin Mobile Qatar claimed VMS would offer: “a prepaid mobile service that combines the coverage and call quality benefits of Qtel’s mobile network with the unique brand experience delivered by Virgin Group.”

ictQATAR’s initial ruling in May 2010 found that VMS was a service of Qtel, and not an independent telecoms operator. However, it did issue a series of instructions to Qtel relating to the marketing of branded services.

But this was followed by a decision, issued on April 4 2011, that called upon Qtel to “terminate its Qtel Virgin Mobile branded services immediately”. It issued a further statement on June 6 2011 reaffirming its instructions that Qtel should discontinue the service, stating that all Virgin Mobile branded SIM cards must be deactivated by August 4.

Qtel has since issued a statement that it will close down the VMS with immediate effect, transferring all VMS customers to its prepaid Hala service.

The branding alliance had played a major part in Qtel’s aim to become one of the top 20 global telecommunications operators by 2020. On announcing the service, Dr Nasser Marafih, then CEO of Qtel, had welcomed the alliance with Virgin Mobile, saying: “We see strong potential for development as a multi-country brand franchise partnership across our regional and international footprint.”

As part of the ruling, ictQATAR has also determined that: “Qtel may inaugurate other new brands only after providing ictQATAR with complete information about its proposals and allowing at least 60 days for review.”

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