Starmap mobile alliance fades as O2 leaves galaxy

The European mobile phone alliance Starmap is on the verge of collapse after O2, the largest operator involved in the initiative, moved to pull out of the partnership.

The Spanish telecoms giant Telefonica acquired O2 in an £18bn deal last year, giving the UK operator a wider network of European sister companies. As a result of the deal, O2 will exit the Starmap alliance and work with Telefonica's other subsidiaries to provide roaming and data services across Europe.

It will maintain bilateral roaming agreements with the remaining members of the alliance, including Italy's Wind and Norway's Telenor.

O2's exit leaves Starmap thinly spread across Europe, given it will no longer have partner networks in major markets including the UK, Germany and Ireland. The remaining companies in the alliance include smaller operators like Pannon in Hungary, One in Austria, and Sunrise in Switzerland.

Starmap was established in late 2003 to offer pan- European roaming services to customers of the participating companies and to collaborate over unique services for corporate customers. The alliance was also designed to give the operators greater power when procuring handsets.

Starmap was set up in response to a rival alliance called Freemove that comprised the large European operators Orange, Telecom Italia Mobile, Telefonica Moviles and T-Mobile.

Both alliances were founded to combatVoda-fone, which owns a pan-European network of subsidiaries. It can thus offer customers consistent services across its operations.

However both Freemove and Starmap have been weakened by industry consolidation. France Telecom's acquisition of Amena forced the Spanish company to withdraw from Starmap while Telefonica exited Freemove after its purchase of O2.

O2 is expected to launch its "high roamer" service later this week, becoming the first company to scrap the fee a user is charged abroad to receive a call. The "high roamer" tariff will be aimed at contract customers who frequently travel. They will be able to choose a group of countries in which outbound calls will cost around the same as the tariff in their local market.