Vodafone and O2 tell committee they are not cartel

The State's two biggest mobile phone firms, Vodafone and O2, have denied they are a cartel or that their prices are excessive…

The State's two biggest mobile phone firms, Vodafone and O2, have denied they are a cartel or that their prices are excessive.

Both companies also disputed the interpretation of statistics presented by the Commission for Communications Regulation (ComReg) to the Oireachtas Communications Committee as part of its inquiry into mobile prices.

In a robust defence of their charging strategies to the committee, Vodafone and O2 management said that Irish people used their phones much more than their European counterparts.

Mr Paul Donovan, Vodafone chief executive, said this extremely high usage was the key reason that Irish people spend more on mobile services than any other European customers.

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For the first time Vodafone revealed that its mobile users on average use their phones for 183 minutes per month. This is higher than usage recorded by several other European operators that also publish this measure, it said.

However, the firm refused to reveal the minutes of use for any other Vodafone group firms or the average cost of a call for pre- pay and contract customers due to commercial sensitivities.

The chairman of the committee, Mr Noel O'Flynn TD, reacted angrily to Vodafone's refusal to release the data and said the committee might have to take further action to obtain the information.

He said the committee might seek to call the Department of Finance to the committee to explain its arrangement with the mobile firm. It may also hire an outside telecoms expert to help its own analysis, said Mr O'Flynn.

Vodafone and Eircom currently share an exclusive contract with the Government for the provision of fixed and mobile services to the public service.

Earlier at a press conference, Mr Donovan disputed figures supplied by ComReg to the committee at a previous meeting that showed Irish mobile prices were among the highest in the world.

He said ComReg had an agenda that was serving to achieve a greater degree of regulation in the marketplace at a time when more competition was about to enter the market.

Clearly regulators like to do what regulators are paid to do. But this would not benefit investment in the market, he said.

Both Mr Donovan and O2's chief executive, Ms Danuta Gray, strongly denied that there was any cartel in operation between the two big operators. O2's chief financial officer, Mr Niall Norton, also disputed an assertion by Mr Tommy Broughan TD that the firms had had an "easy ride" in the Republic.

But Meteor, the third mobile operator , said there was only limited competition between Vodafone and O2 in the Irish market. In a presentation prepared for the committee, the firm said both firms had focused their attention on Meteor rather than competing against themselves.

The firm also disclosed new figures which show that Meteor customers spend on average only €330 per year on mobile services. In contrast, O2 users spend €542 per year while Vodafone customers pay €552 per year.