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Qatar orders Virgin Mobile telecom unit shut

Regular says Qatari operator of brand was responsible for misleading marketing and anti-competitive behaviour

AP, Tuesday 7 Jun 2011

Qatar's biggest phone company pledged Tuesday to shut down a cellular service it operates under Richard Branson's Virgin Mobile brand to comply with a ruling by the Gulf nation's telecoms regulator.

The move will likely lay to rest a nearly yearlong dispute between Qatar Telecom, which goes by the name Qtel, and its rival Vodafone Qatar. Vodafone had challenged Qtel's rollout of Virgin Mobile shortly after its launch as an unfair expansion of mobile services in the booming gas-rich nation.

Qatar's telecommunications regulator ictQATAR ordered Virgin Mobile shut after determining that Qtel's marketing of the brand was misleading. It also found that Qtel engaged in anticompetitive behavior, abused its dominant position in the market and had failed to comply with previous regulatory demands.

Qtel said it will comply fully with the order to close Virgin Mobile, according to a statement Tuesday to Qatar's stock exchange. Qtel plans to switch its Virgin customers to another service it offers, forcing users to swap out their SIM cards or seek refunds for existing prepaid balances on their phones by 4 August.

Virgin did not respond to a request for comment Tuesday.

State-controlled Qtel had a monopoly on Qatari phone services until Britain's Vodafone entered the market in 2009 after paying more than US$2 billion for an operating license.

Vodafone Group PLC holds a minority stake in Vodafone Qatar, with the remainder split between the Qatari government and individual shareholders.

Qtel launched Virgin Mobile as a separate brand in May 2010 in a publicity blitz that included Branson jet-skiing in the Persian Gulf off the Qatari capital Doha. The licensing deal was Virgin Mobile's first foray into the Middle East.

Vodafone quickly criticized the deal, claiming it effectively created a third mobile service provider without the introduction of a new operating license. Qatar's telecoms regulator rejected that argument last July, but ruled then that Qtel had breached other laws.

Vodafone Qatar welcomed the order to shut Virgin's Qatar operations, saying the move "comes after a lengthy and robust regulatory investigation."

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© 2010 Ahram Online.