Vodafone 2008 Annual Report Download - page 150

Europe
Germany
Vodafone’s 900 MHz licence was extended to 2016. In April 2008, the NRA
published the rules for auctioning further 2.0 GHz, 2.6 GHz and 1800 MHz
spectrum, with auctions expected in 2009.
In April 2008, the German Supreme Administration Court rejected lawsuits filed
by the four mobile network operators against the NRA’s decision to regulate
mobile termination rates on an ex ante basis. The German Competition Authority
has commenced an investigation into the use by Vodafone Germany and T-Mobile
Germany of on-net pricing.
During the year, the NRA reduced Vodafone’s termination rate by 9.8% to 7.92
eurocents, valid until March 2009.
Italy
The NRA launched a public consultation for the assignment of 900 MHz, 1800
MHz and 2.1 GHz spectrum and on the implementation of 900 MHz refarming.
The Italian Ministry of Communications assigned 5 MHz of 900 MHz spectrum
to Wind on a temporary basis in 16 main cities. The NRA published proposals
to licence DVB-H services.
The Italian National Competition Authority (“NCA”) closed its investigation into
alleged anti-competitive practices by mobile network operators, including
Vodafone Italy, in relation to network access for MVNOs and other matters.
Undertakings in relation to network access were submitted by Vodafone Italy
and accepted by the NCA, and the case has been closed without sanction for
Vodafone. A new law was enacted prohibiting fees or other charges in addition
to airtime for prepaid services and introducing measures to enable consumers
to terminate contracts without penalty. The Italian NRA published guidelines
requiring operators to reimburse or transfer any remaining prepaid airtime of
customers switching networks.
The Italian NRA and Government commenced discussions with Telecom Italia
about proposed voluntary separation of the Telecom Italia fixed network.
Vodafone currently purchases certain services from Telecom Italia in order to
provide fixed broadband services in the Italian market and it is possible that both
existing and future arrangements between Vodafone and Telecom Italia would
be affected if such proposals were to be implemented.
During the year, the NRA reduced Vodafone’s termination rate by 11.0% to 9.97
eurocents, with the NRA foreseeing further reductions to 8.85 eurocents in
July 2008, 7.70 eurocents in July 2009, 6.60 eurocents in July 2010 and 5.90
eurocents in July 2011.
Spain
The NRA commenced a review of the wholesale market for SMS termination.
The Spanish Competition Authority commenced an investigation against the
three largest mobile operators in Spain, including Vodafone, alleging that the
firms colluded when setting call set-up charges. A new law was passed requiring
telecommunications operators to retain certain data for a 12 month period and
requiring operators to register the identity of new prepay customers and to
register the identity of existing prepay customers within a two year period. The
NRA commenced a review to determine the operators obliged to contribute to
the national universal service fund and the criteria for distribution of the fund.
During the year, the NRA reduced Vodafone’s termination rate by 15.3% to 9.61
eurocents. In April 2008, the NRA reduced the rate to 8.74 eurocents, with
reductions to 7.87 eurocents in October 2008 and 7.00 eurocents in April 2009.
United Kingdom
An auction of 2.6 GHz spectrum is expected to commence in September 2008
and the NRA also proposes to auction 112 MHz of digital dividend spectrum
in the 550-860 MHz range during 2009. The NRA published proposals to allow
refarming of 900 MHz spectrum, but proposed that Vodafone, and O2, first release
2 x 7.5 MHz each for reallocation to other parties. Following consultation, the NRA
has decided to reconsider these proposals.
The appeal by certain stakeholders against the NRA’s decision on setting call
termination rates until 2011 is being considered by the UK Competition Commission
and Competition Appeal Tribunal. Vodafone UK filed an appeal against the
proposals of the NRA to reform the number portability processes and reduce
porting times to two hours.
The NRA announced that it will withdraw certain regulatory obligations from BT
in relation to the provision of wholesale broadband services in certain parts of the
UK market where it considers that BT no longer has SMP, a result of competition
from other fixed unbundlers and cable operators. Vodafone purchases certain
fixed wholesale services from BT.
Vodafone’s average termination rate for the 2008 financial year was 5.70 pence.
Rates declined by 3.2% below the retail price index in April 2008 and will decline
by 2.5% below the retail price index in the April 2009 and April 2010.
Other Europe
Greece
In January 2007, Vodafone Greece was fined €76 million as software foreign to the
network and capable of intercepting calls had been installed without Vodafone’s
knowledge in the network software. Vodafone Greece has paid the fine but is
appealing the decision before the Council of State and a hearing is set for October
2008. In March 2008, Vodafone Greece was fined €19 million by the NRA for
violations of telecommunications legislation and provisions of licences in
connection with the interception incident. Vodafone has appealed the decision.
Vodafone Greece appealed a finding that the three largest mobile network
operators colluded in setting retail SMS prices and won. The NRA then appealed
this decision before the Council of State.
During the year, the termination rate reduced by 15.6% to 9.91 eurocents.
Ireland
Vodafone Ireland has obtained a trial licence to deploy UMTS in 900 MHz
spectrum. In March 2007, a 3G licence was awarded to eircom.
The Netherlands
In March 2007, Vodafone Netherlands’ 900 MHz licence was extended for three
years to 2013. The NRA is expected to consult upon compliance with 3G coverage
obligations in 2008. Auctions of 2.6 GHz spectrum are also expected in 2008.
An appeal by one stakeholder against the NRA’s decision setting call termination
rates was heard and a decision is expected in the coming months. During the year,
the termination rate reduced by 9.1% to 10.00 eurocents. The NRA proposes to
reduce termination rates to 9.00 eurocents in July 2008 and to 7.00 eurocents in
July 2009.
Portugal
The NRA decided to implement technology neutrality for 900 MHz spectrum,
paving the way for refarming. The NRA proposed to allocate, through a public
tender, 450 MHz spectrum for mobile services.
A new law concerning unfair commercial practices was enacted in April 2008 that
prohibits the rounding up of charges and introduced a series of associated tariff
transparency measures.
During the year, the NRA published a proposal for future termination rates.
This proposal is yet to be finalised and the termination rate applied in Portugal
remained unchanged at 11.00 eurocents during the year.
France
The NRA issued a call for tenders for a fourth 3G licence by July 2007. No licence
has been awarded to date. The NRA authorised refarming of the 900 MHz and
1800 MHz bands.
The French Competition Council has issued a Statement of Objection to SFR
concerning on-net pricing in certain tariffs.
148 Vodafone Group Plc Annual Report 2008
Vodafone – Additional Information
Regulation continued