Following a lengthy investigation of the wholesale charges for international roaming on mobile telephony networks, the European Commission has, in exercise of its competition law powers, sent two separate 'statements of objections', addressed to the UK operations of Vodafone and of O2 (formerly Cellnet).

The European Commission's preliminary position is that Vodafone and O2 "exploited their dominant position in the UK market for the provision of international roaming services at wholesale level on their own network", and that "the abuse consisted in charging unfair and excessive prices to European mobile network operators".

According to the European Commission, the roaming services in question yielded profits several times higher than other comparable services supplied by the same operators, in particular, for similar calls made on their respective networks by UK subscribers of “Independent Service Providers” to whom both Vodafone and O2 have supplied wholesale airtime access.

The periods to which these findings apply are:

• Vodafone: From 1997 'at least until end-September 2003'.
• 02: From 1998 'at least up until end-September 2003'.

In a short background document accompanying the announcement, the European Commission explains the relationship of this development with the market analysis procedures which are ongoing in all EU Member States in application of the new EU regulatory framework for electronic communications, by stating the following:

"Although the new regulatory framework entered into force on 25 July 2003, none of the NRAs has so far carried out a market analysis of this market. The Commission’s market definition with regard to the UK market is therefore without prejudice to the market analysis that NRAs will carry out in the future. This is true both for the question whether the wholesale market for the provision of international roaming services should be defined as being network specific or as encompassing all existing GSM networks, and as to the imposition of an appropriate remedy on MNOs found to have Significant Market Power (SMP). Indeed, their market analysis, contrary to the current proceedings will deal exclusively with the future market situation."

The statements of objections set out the European Commission’s preliminary position on infringements of the competition rules. Both Vodafone and O2 will now have the opportunity to respond to the Commission’s preliminary findings in writing and in an oral hearing.

The full text of European Commission press release IP/04/994 can be accessed by clicking here.

The accompanying background document MEMO/04/198 can be accessed by clicking here.