Telecom law creates ‘monopolistic environment’, Gibfibre says
Local telecoms company Gibfibre has hit out against legislation prohibiting new licences for mobile phone operators, adding it will create a “monopolistic environment” and “stifle competition” in this sector.
The telecoms company said it had planned to launch a mobile network service locally and believes the change in law was intended to curtail its ability to do so.
“Gibfibre has made no secret of its intention to move into the mobile market shortly,” the company said in a statement.
“It has spent considerable time preparing itself to launch a mobile network offering, preparation for which has involved very significant costs and expense involving, for example, the employment of staff, acquisition of sites and offices, purchase of equipment, feasibility studies, completing town planning processes and site and network configuration.”
Gibfibre said it fundamentally disagreed with the Government's view that the legislation is "essential for the telecommunications in Gibraltar to be able to keep on growing and keep on improving".
In its view, the amendment to the existing legislation has been designed to prevent it from entering the mobile network business in Gibraltar and “to ensure that Gibtelecom has a monopoly in this market”.
The Chronicle reported on Monday that Parliament had passed an amendment to the Communications Act 2006 prohibiting the minister responsible for telecommunications, or any person appointed by the minister, from issuing any new licences for the operation of mobile telephone networks in Gibraltar.
In presenting the Bill, the Minister for Inward Investment, Sir Joe Bossano, said current legislation was based on EU directives that did not suit a small local market like Gibraltar.
Outside the EU, Gibraltar now had an opportunity to adopt telecommunication legislation “which is better for our needs”, he said.
The Government’s rationale for introducing this new law was that splitting the market size of Gibraltar could result in no local providers for mobile services.
It said it would now be looking to comprehensively reform Gibraltar’s telecommunications legislation.
“In doing so we will be looking at what similar approach has been taken in those other small jurisdictions like Andorra, Monaco and indeed the Falkland Islands, in terms of protecting the stability of telecommunications given the small amount of consumers in all of those territories which are similar to us,” Sir Joe said at the time.
Sir Joe added that the law was “overdue” and essential to keep the telephony industry going and to allow Gibtelecom to further invest in the sector.
“Everything that we have in Gibraltar today would not be here if the telecoms had not been transformed as they were in 1988 when Nynex came in and we had a quantum leap in our technology,” he said.
“Today Gibtelecom is in a position where it needs to have a secure home base from which it can then invest in technology because the decisions that are taken every time we upgrade, are decisions that are massive compared to the size of a market where we are the only one, never mind if the market is fragmented.”
The Bill was taken using powers for emergency legislation, something the Opposition said had denied an opportunity for proper scrutiny and debate.
“It denies the public a chance to studiously reflect on the relative merits and drawbacks on this serious piece of legislation and their implications,” GSD MP Craig Sacarello said during the debate in Parliament.
The Opposition abstained from voting on the Bill, which was passed by Government majority.
Sir Joe said the reason for taking the Bill urgently rather than allowing the normal six weeks of scrutiny time was to prevent any operators from exploiting that six-week window.
“If you are going to say that the door that is open today is not going to be open forever, then people who have no intention of applying for a licence would say ‘well I am going to apply before the door is shut’,” he said.
This week, Gibfibre said it was dismayed by the amendment in the Communications Act 2006, which in their opinion “safeguards the market dominance of Gibtelecom”.
The company echoed the GSD’s concerns, insisting the Government had prevented the Gibraltar Parliament from scrutinising the merits of the Bill given its anti-competitive impact on the telecommunications market in Gibraltar.
“It is of considerable concern that despite the matter being certified as urgent no proper basis for the urgency has been advanced,” Gibfibre said.
Gibfibre has said it “considers that the new legislation may well be in breach of the constitution”.
“The Bill has been published - and the amendment passed - without prior consultation and appears to be aimed at limiting consumer choice and stifling healthy competition in this market for the benefit of Gibtelecom,” Gibfibre said.
The statement added that, unchallenged, this law could “create a monopolistic environment within Gibraltar for Gibtelecom as the only existing active mobile network operator”.
Gibfibre added that Gibtelecom is currently owned and controlled by the Government of Gibraltar and that two Government ministers currently serve as directors of Gibtelecom.
The statement also highlighted concerns that without competition, the ability to set prices will remain concentrated with Gibtelecom.
“Whilst in just about every European market, competition is encouraged by law to drive innovation, lower prices, and improve service quality, the amendment appears to be steering Gibraltar in the opposite direction by constraining consumer choice in respect of an important local resource,” Gibfibre said.
The telecoms company added that the law means that innovation can occur only at the pace set by Gibtelecom in accordance with its own priorities, free from competitive pressures.
“Gibfibre believes that Gibraltar deserves freedom of choice and fairer pricing consistent with healthy competition,” the company said.
“Any legislation proposing to restrict consumer access to a competitive marketplace is a significant step backwards.”