BASE quits Belgian fixed market as Mobistar plans to wade back in

BASE Belgium plans to stop marketing fixed services on the Belgian market at the end of June 2015 because it believes it is no longer economically feasible to continue with the service.

The KPN-owned mobile operator--which started selling fixed broadband, voice and TV services under its triple-play SNOW brand in February 2013 to offer an alternative to incumbent operator Belgacom--said content rights and connection costs are too high for a challenger in the fixed market. The company said SNOW customers would be able to make use of a free transfer to Scarlet, which offers a similar triple-play service on the market.

The move also means that ProNet&Tel services offered by BASE business to commercial customers will also be discontinued.

"The government has not provided a favourable environment for a new entrant into the closed fixed market. All that is required to change your mobile operator, bank or electricity supplier is a signature. But switching from one fixed operator to another is still troublesome, making customers reluctant to do so," BASE said.

BASE's comments about the unfavourable regulatory environment reflect remarks from rival operator Mobistar, which is in the process of re-entering the fixed market by taking advantage of new regulations forcing cable operators to open their networks.

The operator, which is majority owned by Orange, was forced to stop marketing fixed services last year after it said a lack of competition on the Belgian residential fixed market made it impossible to sell landline services to customers at a profit.

Mobistar, which is now testing Internet and digital TV services on cable networks and recruiting its first external test users in Charleroi, said the commercial launch of its new fixed services will depend not only on the outcome of these tests, but also on the wholesale rates for cable-based Internet and TV service--rates the company says are not yet attractive enough to allow it to enter the market in a profitable way.

BASE said it now plans to focus on investments in mobile communication services and the new developments and technologies being offered in the market.

"In today's market circumstances, releasing investment capital in order to break into the inaccessible market of digital TV is no longer an option," the company said, adding that it remains convinced that the Belgian consumer is paying too much for digital TV, Internet and fixed telephony.

"The market for digital TV needs a strong challenger, and SNOW wanted to take on that role. BASE Company will continue to support a regulatory framework in the fixed market that is similar to that of the mobile market and therefore promotes fair competition in the interests of the customer," the company said.

Meanwhile Belgacom has benefited from its convergence strategy: the company said in July that the combination of mobile plans with fixed products enabled it to build its mobile base further and offset lower revenue from mobile services.

For more:
- see this BASE release

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