Ooredoo Qatar fined for anti-competitive conduct

Published September 26th, 2016 - 09:30 GMT
By refusing to grant access despite requests from the authority, it was concluded that Ooredoo had damaged competition and “likely maintained artificially high prices for consumers”. (Wearandpoint.com)
By refusing to grant access despite requests from the authority, it was concluded that Ooredoo had damaged competition and “likely maintained artificially high prices for consumers”. (Wearandpoint.com)

Former telecoms monopoly Ooredoo Qatar has been accused of damaging the economy and engaging in “anti-competitive” conduct by the country’s communications regulator.

A 41-page formal decision published this month by the Communications Regulatory Authority (CRA) concluded the telco had not given Qatar National Broadband Network (QNBN) and rival Vodafone access to its ducts for installing fibre broadband.

This followed a complaint from both firms in March this year, according to Doha News.

By refusing to grant access despite requests from the authority, it was concluded that the firm had damaged competition and “likely maintained artificially high prices for consumers”.

Ooredoo was ordered to place millions of riyals in a ‘performance bond’ as punishment.

QNBN was established in 2011 with a mandate to establish a national fibre network but progress has been limited so far.

The network was intended to be used by both operators, most noticeably to the benefit of Vodafone which as the more recent entrant lacked its own fixed line network in the country.

However, QNBN and Vodafone complained Ooredoo had repeatedly blocked access to the ducts its owns as the country’s former monopoly operator.

The lack of access to a fixed line network of its own was considered the motivation behind Vodafone’s attempt to acquire QNBN in late 2014, in a deal that was later scrapped.

In an interview with Gulf Business last year, Vodafone Qatar’s former CEO Kyle Whitehill expressed his frustration with the lack of duct access in the country and suggested Ooredoo controlled 98 per cent of the fixed market.

“In a monopolistic broadband environment, the networks aren’t good enough, the content is not good enough and you’re paying ten times as much as you would be in the UK or America,” he said.

In its report, the CRA argued that Ooredoo was “well aware’ its duct network was not replicable and there was no practical alternative.

“Therefore, Ooredoo’s blunt refusal to allow other operators access to its duct network does not only impede QNBN directly, but it also substantially lessens competition,” the CRA said.

Using empirical findings and the assumption of 10 per cent higher broadband penetration, the CRA said incremental GDP per capita growth of 0.4 per cent could have been lost due to Ooredoo’s conduct.

“Based on Qatar’s average GDP per capita (in constant 2013 prices) of QAR360,387 ($98,965) over the period 2011 to 2015, this would equate to an incremental GDP per capita of up to QAR5,005 ($1,374).”

Ooredoo was also accused of limiting the means for Qatar to diversify its economy “in stark contrast to the goal of Qatar National Vision 2030”.

The authority concluded that the damage of the operator’s conduct “far exceeds” any possible fine.

It was ordered to file a QAR15m ($4.1m) ‘performance bond’ with a Qatari bank as a guarantee of compliance with all obligations of its fixed service licence.

By Robert Anderson
 

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