Oftel to curb unfair cross-subsidies by mobile networks

OFTEL, the telecommunications regulator, has accused Cellnet and Vodafone of unfairly cross-subsidising their own service providers - the middlemen through which the network operators sell airtime to the public - to the detriment of the independent service companies.

Oftel also claims that Securicor, which is BT's minority partner in Cellnet, has been unfairly cross-subsidising Securicor Cellular Services.

Oftel is demanding an end to cross-subsidy. It wants the network operators to submit quarterly financial results of their service providers to prove they have done so. The accounts will be independently audited.

The ruling comes after a two-year investigation which was prompted by complaints over unfair practice by Talkland International, a service provider owned by Generale des Eaux of France. Talkland is now 30 per cent owned by Vodafone.

Don Cruickshank, the director-general of telecommunications, said: 'I am determined this market should operate in a completely fair and open manner so that all participants - large and small, tied to the networks or independents - have an equal opportunity to compete for business.'

However, new mobile network operators, Mercury One-2-One and Orange, will be allowed to subsidise their in-house service providers for one year after launch.

Cellnet attacked the ruling as unnecessary. 'We are disappointed at the prospect of an increased regulatory burden,' a spokesman said.

Vodafone denied any discrimination and said bonuses were paid to service providers to help them attract new business on to the network, whether tied to that network or not. The subsidies paid can be more than pounds 100 for each new subscriber gained for the network.