Orange's Mobistar takes further steps towards return to convergence play

Belgium-based mobile operator Mobistar has taken its first concrete steps towards resuming sales of fixed-line services with tests of its Internet and digital TV services on cable networks, and the recruitment of its first external test users in the Charleroi borough.

However, the commercial launch of new fixed services from Mobistar 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.

"That is why Mobistar has initiated an appeal proceeding against the decision on the wholesale prices defined by the regulators. Mobistar reiterates and insists vis-à-vis the regulators that these conditions must be rapidly improved in order to permit new entrant to enter the market in a profitable way and at the benefit of the consumer," the company said in a statement.

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.

The opening up of the country's cable networks now provides Mobistar with a new opportunity to buy wholesale cable network access and offer its own Internet and TV services.

Mobistar is taking such steps because it considers fixed services to be an important part of its overall strategy towards becoming a converged player. Indeed, rival Belgacom has particularly benefited from its convergence strategy, and 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. KPN's BASE resells Belgacom fixed services under its SNOW secondary brand.

However, Mobistar's convergence ambitions have been slower to realise than the company originally anticipated: as long ago as January it paid €1.2 million ($1.49 million) to the market's cable operators for the introduction of wholesale cable services within a period of six months.

One of the cable operators, Telenet, has since appealed against the regulations forcing it to open its network, but a court rejected its appeal in a November ruling. Mobistar said this ruling confirms the decision of the regulators to regulate the cable market.

"The efforts and investments currently being undertaken by Mobistar to develop attractive services for consumers via the cable networks will make it possible to significantly improve competition on the Belgian market," the company commented.

For more:
- see this Mobistar release

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