Carrie Pawsey
Carphone to be the first Portuguese MVNO?
It has been reported this morning that Carphone Warehouse (CPW) has signed a wholesale MVNO airtime deal with Sonaecom, part of the Sonae Group, which is the owner of the smallest Portuguese mobile network operator (MNO) Optimus. CPW currently operates as a retailer in the market through its Phone House stores. Comment: CPW's European MVNO operations continue to expand - it has already launched in France and has its existing operation in the UK. CPW is also said to have formed an agreement in Germany with e-plus some time ago (although we haven't seen it launch there) and it is also rumoured to be negotiating for an MVNO deal in Spain. The brand name used for its MVNO services is not consistent across all markets. In the UK it has three MVNO brands - Fresh, Talk Talk and Mobile World. In France it initially launched as a small regional player called Breizh Mobile, but now it has teamed up with Virgin and utilises the Virgin brand. In Portugal it is believed CPW will use the Talk Talk brand, which is associated with its fixed line telephony and broadband business. The CPW MVNO operations to date have not been particularly aggressive. They have focused on offering SIM-only packages and have not heavily promoted them in store. What will become interesting is if CPW decides to offer a richer MVNO service and starts linking together its handset procurement business along with its own SIM cards in order to offer a complete MVNO package to the consumer. However, CPW comes very close to competing against the network operators, and yet they are CPW's primary customers for its retail business. It would be foolish to sacrifice its main revenue stream for an unproven MVNO model.This is the first MVNO deal publicly reported in Portugal. The regulator has been carrying out its Market 15 analysis and it was anticipated that Anacom could find it insufficiently competitive - as occurred in the Spanish market earlier this year. It will be interesting to see if these early MVNO announcements will be enough to appease the regulator to not mandate access.There is also the issue of how binding the CPW deal with Sonaecom is. At present the Sonae Group is trying to purchase Portugal Telecom, the parent company of Portugal's largest MNO TMN. Should Sonae's next bid be successful in purchasing Portugal Telecom, then it could end up owning both Optimus and TMN (with a combined market share of 66%). This is likely to raise some eyebrows with the regulator and it is not clear if Sonae would keep hold of either TMN or Optimus. Therefore, with Sonae Group's takeover of Portugal Telecom still not resolved, our advice would be that CPW should either wait to see how this will play out before investing in MVNO operations, or that CPW must have binding service level agreements contracts that take into consideration any further acquisitions.
