Swan still waits for deal on national roaming

Late decision may cost the operator collaboration with the postal service.

The mobile market in Slovakia is getting more dense. The mobile market in Slovakia is getting more dense. (Source: Sme)

NEW MOBILE services provider Poštatel may start offering its services to customers as of this autumn. The project of the state postal services operator Slovenská Pošta and a fourth telecommunication operator Swan is, however, conditioned with granting permission to the latter to use networks of established mobile operators within the so-called national roaming. If it does not get it, the postal service may search for another partner.

The Regulatory Authority for Electronic Communications and Postal Services (RÚ) issued on March 25 a preliminary provision setting the basic conditions for three established telecommunication operators to provide the national roaming to Swan, with which they competed on frequencies to offer 4G network frequencies in 2013. When taking the licences, O2 Slovakia, Orange Slovensko and Slovak Telekom promised to offer their networks to Swan. However, they did not strike a deal even after 10 months of negotiations, so Swan turned to the RÚ to solve the dispute in November 2014.

Though the RÚ was to decide on the case by March 25, with the preliminary provision it postponed its deadline by another four months.

“With the preliminary provision the whole situation only has become more complicated,” Peter Steigauf from the Živé.sk website told The Slovak Spectator.

When setting the conditions for competition, the regulator was inspired by previous experiences and information from national regulatory authorities from other European countries.

“None of the operators complained on the commitments or the conditions,” RÚ’s spokesman Roman Vavro told The Slovak Spectator.

The RÚ should have defined the conditions of the LTE licence more clearly “with the aim to prevent disputes and misunderstandings”, Steigauf said.

Discussions will continue

The RÚ ordered the three operators to offer Swan national roaming under conditions that will provide Swan’s customers with the same extent and quality of services given to their own clients. The companies also must ask Swan for a fee which they will agree during talks. If they do not agree, the fee will be set by the RÚ, Vavro explained.

Such a case would be a rare example in Europe, as the operators usually agree during the talks, said Steigauf.

While Slovak Telekom and Orange did not want to comment on the preliminary provision, O2 Slovakia considers it “absolutely illegal and inappropriate interference into competition in Slovakia’s telecommunication market”, said its spokesperson Martina Jamrichová.

“Imagine that somebody will force you to provide a service to your rival for free, with saying it maybe will pay for it in the future, but you do not know how much,” Jamrichová told The Slovak Spectator, adding they will take steps to prevent such interference.

Swan, however, hopes that all three providers will respect the decision. They plan to continue with negotiations with them in order “to obtain nation-wide coverage for our customers as soon as possible”, Martin Mosný, head of strategy and development at Swan, told The Slovak Spectator.

Both Orange and O2 Slovakia confirmed the ongoing negotiations with Swan, though they say there has not been much progress and, according to Jamrichová, Swan seems to want to rely on state interference.

Permission necessary

Swan obtained 4G network frequencies for €6.6 million in 2013. It plans to provide mass mobile services in cooperation with Slovenská Pošta under the brand Poštatel and focus on more sophisticated services under its Swan brand. In total it plans to invest €100 million into the mobile services.

“Slovenská Pošta is a company which has the biggest distribution network in Slovakia, which we would like to use as a mobile operator,” Mosný said.

Though the company claims it is prepared for the cooperation, it needs to get permission for national roaming “as it does not have its own network with nation-wide coverage”, said Slovenská Pošta’s spokeswoman Stanislava Pondelová. This model has already been used in Slovakia in 2006 when O2 entered the market. It used the network of Slovak Telekom, the Sme daily wrote.

The companies already signed a memorandum on cooperation last autumn, based on which Slovenská Pošta will get 20-percent share in the firm and will have a deciding word on its future development. They will, however, wait for two years with the purchase to see whether Poštatel is successful. If not, it would step out of the business, Sme wrote.

Meanwhile, Slovenská Pošta has prepared a business plan and also a proposal of initial products and prices. In the first phase it plans to focus on its current employees and offer them pre-paid services, said Pondelová.

Though both Swan and Slovenská Pošta say they want to offer mass-oriented products, we still do not know the exact portfolio, said Steigauf. Therefore it is hard to predict what impact it would have on the market, he added.

“Slovenská Pošta is undoubtedly strong in the countryside and in the regions, so the potential offer of the provider will also focus there,” Steigauf explained.

Disputes over national roaming

As Swan is only building its network, based on the licence, it can use the national roaming after it has built a network covering 20 percent of Slovakia’s population. The national roaming plan should secure that Swan’s clients can use its services also in areas where it has not yet built its own network.

But it has failed so far to clinch an agreement with an established mobile operator on the national roaming, thus the matter has escalated.

On February 23, the Bratislava court issued, at the request of Orange Slovensko, the biggest mobile operator in Slovakia, a preliminary injunction stating that Orange does not need to provide national roaming to Swan. Orange argued that its network is not prepared for usage by two mobile operators and that the danger of a network failure can be prevented only by extensive technical measures and investments exceeding €1.6 million, according to the Pravda daily.

Swan responded by filing a counter complaint, as it believes that during the auction of frequencies two years ago one of the operators committed fraud.Swan’s General Director Miroslav Strečanský explained at a press conference on March 12 that the provision of national roaming was one of the conditions on which the mobile operators received their licences. And when Orange now claims that it is not able to provide the service of national roaming, it is actually violating conditions of its licence.

The preliminary injunction does not pertain to the other two mobile operators, Slovak Telekom and O2.

Meanwhile, the RÚ confirmed on March 16 that Swan has already covered more than 20 percent of Slovakia’s population via the granted frequencies and thus is entitled to national roaming. This was confirmed by calculations based on the list of Swan’s stations that will be established until December 15, 2015, as well as inspections of the base stations carried out by the RÚ, states the press release.

New competition possible

Slovenská Pošta will, however, not wait long for Swan to begin offering its telecommunication services.

“Slovenská Pošta wants to launch the offering of mobile telecommunication conditions under its own brand to catch the strong pre-Christmas season,” Pondelová said.

If Swan fails to meet the conditions, Slovenská Pošta will announce a new competition, Pondelová added. In this event it would be only a virtual operator, meaning that Slovenská Pošta will have its own SIM cards, products and pricing policy, but its customers will actually use the services on the network of another mobile provider, Sme wrote.

This was a reason Slovenská Pošta first approached Swan. As Swan lacks a strong sales network and brand, Slovenská Pošta would offer and provide all of this to the firm, its head Tomáš Drucker told Sme.

“ Slovenská Pošta’s priority is to offer telecom services under its own brand, regardless of the final selection of a partner,” Pondelová said.

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