Fixed Mobile Convergence

Qatar’s regulator ictQATAR says Qatar Telecom, known as Qtel, may face “an unspecified fine and possible further legal action over violations during its launch of Virgin Mobile (News - Alert) services into the Gulf state.”

In a ruling made public, the regulator said that Qtel should be compelled to pay an appropriate fine for its unlawful actions during the period from May 13 to 18, 2010. For the assessment of an appropriate penalty, this matter was also referred to the Office of the Attorney General.

Vodafone (News - Alert) Qatar and Qtel earlier welcomed a ruling by regulators in a dispute over Virgin Mobile's entry to the local market in May. However, there were signs that the battle may have further to run.

According to ictQATAR, Qtel’s (News - Alert) actions during this period may constitute violations of laws other than the Telecommunications Law.

The ruling asked for changes in Virgin Mobile's launch but said that Virgin would not be a third operator.

Virgin Group VA.UL signed a partnership with Qtel to launch Virgin Mobile Qatar in a brand licensing agreement to offer a prepaid mobile phone service in May.

The service was built around the concept, “the more you talk, the less you pay.”

According to company officials, the service promised to provide a great value, flexible service that everyone in Qatar can enjoy. Local calls will cost just QR 0.55 per minute for the first five minutes each day, and QR 0.30 per minute after that. Mobile Internet will cost just QR1 per megabyte - the best value in Qatar, the company said in an announcement after the launch.

Vodafone Qatar had said it saw Virgin Mobile's entry as a violation of the conditions to its license. This will cost shareholders approximately $2.12 billion, and the telecoms law in Qatar. Vodafone Qatar had said Virgin represented a third service provider.

According to company officials Vodafone Qatar is currently reviewing ictQATAR's determination and considering its options for further legal recourse in relation to this matter.

In 2007, Vodafone won the bid for Qatar's second mobile telephone license to break the monopoly of Qtel in the small Gulf Arab state.

"Our lawyers are reviewing the decision and will shortly advise Vodafone Qatar's board on our options for legal action that are in the interest of our shareholders and for damages resulting from Qtel's behavior which has been found to be illegal by ictQATAR," Vodafone Qatar chairman Sheikh Abdulrahman bin Saud al-Thani, said.