Austrian, MVNO, Spusu
Spusu, a small mobile virtual network operator (MVNO) from Vienna, wants to operate on the German market and considers itself subject to discrimination, reports Die Presse. Telefonica, known under the brand O2, will not allow Spusu access to its German network. Spusu is of the opinion that it is obliged to do so, as that was a requirement of the EU anti-monopoly watchdog for the merger of Telefonica and E-Plus. Now Spusu is taking action against the EU Commission in court.
The EU Commission examined the mega-merger in 2014 from the antimonopoly point of view. One of the conditions, according to the Spusu’s CEO Franz Pichler, was that Telefonica should accept MVNOs in its network. However, the Spanish concern allegedly has refused access to Spusu and other operators, and the European Commission has taken no action.
The promise that Telefonica made to the Brussels administration was allegedly very soft and compliance with the condition could not be verified. Spusu is a full MVNO, meaning it has everything except for masts and a mobile network, which it wants to lease from Telefonica. Spusu has the rest of infrastructure and wants to use it in Germany, too.
In summer 2016, Telefonica, a concern with a stockmarket value of EUR 45 billion, denied blocking the MVNO from accessing its network. Since July 2016, it allegedly offers partners access to the LTE network. Those who do not accept the conditions, do not get access, the company’s spokesperson told German daily Die Welt in August 2016.
Spusu considers that competition is being hindered and in December 2016, Spusu filed action against the European Commission with the European Court of Justice (ECJ), proposing to invalidate the merger approval, Pichler told APA. If the complaint is accepted, the Brussels administration would need to carry out the merger procedure again, hopes Pichler.
In Germany, the mobile market is practically without any competition, thinks Pichler. In terms of network technology, the neighbouring country is a developing country. Customers pay for mobile data thirteen times what Austrians pay.
The German antimonopoly office also sees it this way. It shares Spusu’s position and in 2016, it addressed the European Commission. The German antimonopoly office has sharply criticised the merger of O2 and E-Plus from the beginning. In a letter to the European Commission, the German authority said that “so far, only slight signs of a sustained positive competitive development… are apparent”. A foreign MVNO would be welcome.
However, the German antimonopoly office was not competent to approve the O2/E-Plus merger; this fell to the European Commission.
According to Spusu’s CEO Pichler, German mobile customers lose a great deal as a result of the merger. They get too little value for their money.
In fact, Germans use the internet on mobile phones comparably little because it is so expensive. According to the Finnish market researcher Digital Fuel Monitor, Germans get 6 GB on the 4G network for EUR 30, while in Austria, they get 20 GB for the same price. In the French market, it is even more, at 50 GB. In a couple of Scandinavian and Baltic states, as well as in Ireland and Poland, customers with contracts for at least 1,000 minutes and SMS get completely unlimited data.
Spusu wanted to enter the German market as long ago as the middle of 2016 and to create more than 1,000 jobs within five years. It assumed one position per 3,000 customers, said Pichler.
In Austria, Spusu now serves 50,000 SIM cards. With more than 10 million SIM cards in the country, its market share is still small, but the growth is enormous. More than 10 percent of new mobile contracts are with Spusu, said Pichler. Spusu focuses on private customers. Since December 2016, it has been selling coupons at newsagents, too.
Recently, the revenues of Spusu have grown to EUR 9 million, up from EUR 5 million in 2014 and EUR 7 million in 2015. Spusu has its headquarters in Vienna, but about 70 employees are based in Wolkersdorf (Lower Austria).
Opening networks to MVNOs has been successful in Austria, said Pichler. In summer 2015, Spusu joined the network of Hutchison Drei Austria. The European Commission made the merger of Orange and Drei conditional on opening up the networks of large operators Telekom Austria, T-Mobile Austria and Drei to sixteen MVNOs. Beside Spusu, UPC Mobile also trades in Austria as a virtual operator.
Earlier, the MVNO market in Austria was open only to so-called ethnic operators, like in Germany, explained Pichler. In Germany, it is not only Spusu that wants to enter the market, but other MVNOs as well. Five of them have filed an action, too.
Spusu is a brand of the former Telekom Austria‘s subsidiary Mass Response, which Pichler bought via management buy-out in 2011. Mass Response provides telephone voting, e. g. for song contests, operates a call centre and offers firms fixed network and internet.