LONDON-The United Kingdom’s Office of Telecommunications announced it has ended its restrictions on how mobile phone operators may market and distribute airtime and products.
The new regulation, which will go into effect after a year-long transition period, will give Orange, One2One and two other smaller U.K. operators the freedom to sell airtime and distribute products directly to customers.
Today, all mobile phone operators must provide airtime and product distribution to third-party service providers, which then sell it at a higher price. Oftel decided the smaller operators have less market power and should therefore be allowed to offer their services directly to customers at a lower price than their larger competitors.
“This change will give them more freedom to decide how to market products and should benefit customers by helping to increase competition between mobile network operators,” Oftel said in a statement.
“Orange welcomes the Oftel announcement to amend our license to remove the obligation to deal with service providers,” said an Orange spokesperson. “It is something that we have been asking Oftel to do for some time. This will give us the ability to deliver a clear and simple proposition to our customers and the flexibility to develop a distribution strategy which is appropriate to the changing marketplace. The license change will also remove an element of unnecessary regulation from the mobile phone market, properly reflecting the fact that it is a genuinely competitive market. The announcement is therefore a welcome contribution to deregulation.”
Larger U.K. operators such as Vodafone Group plc, and Cellnet must continue to accommodate service providers-as must Orange, One2One and the others until the transition period is over.
The ruling follows a lengthy consultation process that began in 1996 in which Oftel said it was looking to define and end unnecessary regulations on cellular companies. Oftel said it has not made any changes to Vodafone’s or Cellnet’s licenses, but that it does intend to review all mobile phone service provider licenses further and future changes may include the two larger operators.
