HASHEMITE KINGDOM OF JORDAN

Telecommunications Regulatory Commission (TRC)

Information Memorandum on the Provisioning of Mobile Virtual Network Operator (MVNO) Services in Jordan

Amman, 26 September 2007

Telecommunication Regulatory Commission PO Box 850967 Amman 11185 Jordan Telephone (962) 6-5501120 Fax (962) 6-5863641

Table of Contents11.1

Introduction

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Structure of this document .................................................................................3

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TRC's responses to all comments received within the period of public consultation 4

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TRC's responses to all comments received to the Draft Regulatory Decision 26

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Executive SummaryIn accordance with Article 6e of the Telecommunications Law, the Telecommunications Regulatory Commission (TRC) is required to stimulate competition in the telecommunications and information technology sectors, relying on market forces, and regulating them so as to ensure the effective provision of telecommunication and information technology services. Therefore, and so as to fulfil such responsibilities, the TRC published a public consultation on the implementation of Mobile Virtual Network Operator (MVNO) services and related matters on 14th January 2007. Comments were invited from interested parties on the most appropriate method of implementing MVNO in Jordan. Following the assessment of the comments received to the said consultation, the TRC published on 5th June 2007 a Draft Regulatory Decision on the Provisioning of MVNO Services in Jordan. Which Draft Decision proposed a regulatory approach for the introduction, regulation and provisioning of such services, and set out the TRCs plans to work with licensees to ensure adequate provisioning of Public Mobile Wireless Services by MVNOs. All interested parties were invited to comment on the Draft Decision. The TRC, in-line with Government Policy in ICT and Postal Sectors, aims by facilitating and promoting the entry of non-facilities based mobile providers in Jordan with minimum regulatory intervention, to encourage further investments in the Mobile Telecommunications sub-sector and to further enhance the competition within this sub-sector through the expansion of customer choice in the provision of mobile telecommunications services, lowering of costs to users, increased mobile penetration rates and stimulating economic development in Jordan. The TRC expects that through the introduction of MVNO in Jordan, more services, advanced technologies, and lower prices will become available to the consumer. This document summarises the responses received to the public consultations and presents the TRC conclusions. Concurrently with this document, the TRC is publishing its Regulatory Decision on provisioning of such services as approved by the Board of Commissioners of the TRC.

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Information Memorandum on the Provisioning of Mobile Virtual Network Operator (MVNO) Services in Jordan 1 IntroductionThe Telecommunications Regulatory Commission (TRC) published a consultation document seeking comments on the broad principles that should govern the implementation of MVNO in Jordan. The consultation document was published on 14th January 2007. Following the said consultation, the TRC published its Draft Regulatory Decision on the Provision of Mobile Virtual Network Operator (MVNO) Services in Jordan. Through a second consultation, comments on the Draft Decision were invited from all interested parties. This information memorandum responds to and concludes the two consultations on provisioning of MVNO services in Jordan.

1.1 Structure of this documentThis information memorandum is presented in two parts: 1. Detailed responses to the comments received within the two public consultations from all concerned parties. 2. The conclusions reached by the TRC on various issues related to the introduction, regulation and provisioning of MVNO services in Jordan.

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2 TRC's responses to all comments received within the period of public consultationIn this section of the Explanatory Memorandum there is an analysis of all of the comments received by the TRC during the period of public consultation. Formal responses were submitted from the following parties: 3. 4. 5. 6. 7. 8. 9. Jordan Telecom (JT) Fastlink Umniah XPress i2 Moobility Bell Jordan

The consultation posed a set of 16 questions to be considered by interested parties and comments were invited. All parties had the chance to submit reply-comments to those originally submitted within a period of 10 additional days. Fastlink, Umniah and Moobility also submitted reply-comments at the end of the public consultation period. This analysis of comments follows the structure of the consultation document and for each question gives an analysis of the comments and, where applicable, the replycomments received. The analysis for each question is completed by the presentation of the TRCs conclusions.

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Q1: There is a range of ways in which MVNO can be put into effect depending on the extent of the use of the mobile operators facilities: TRC welcomes views on: a) What these variations might be; b) The potential barriers to establishment associated with such approaches; c) The potential regulatory remedies that may be adopted. Jordan Telecom (JT): JT presented three business models: 1) Service Providers (a simple reseller not having its own infrastructure or Mobile Network Code (MNC); 2) Enhanced MVNO (offers its own billing and customer care and can differentiate on services and application); and 3) Full MVNO (having all the network elements, including switching and transmission except the air interface (radio spectrum), issues its own SIM-cards with IMSI numbers and own roaming agreements, therefore, it can take a more independent role from the Mobile Network Operator (MNO) with the possibility to use several MNOs and offer end-users the potential to access their preferred networks). JT recommended the Service Provider concept subject to commercial agreements between MNO and MVNO. Fastlink: Fastlink agreed that there can be more than one type of MVNO be it: Pure MVNO; Wholesaling MVNO; Service Provider; or Reseller. Fastlink stated that MVNO, in any form of the above is merely a commercial agreement between the network operator and a business partner. Fastlink does not support TRC in mandating MVNO as a regulatory remedy. Fastlink is also against the idea that MVNO will contribute to the establishment of effective competition claiming that competition is already intense, in particular the competition for new subscribers, and that most competition is based on a trade-off between price and quality. Fastlink also added that it is impossible for MVNOs to compete on quality, as they cannot offer higher quality than the underlying MNO. They are therefore left to compete on price. This could lead to unnecessary price wars, inefficient customer churn and the possibility of companies leaving the market, as happened to EasyMobile in the UK. Fastlink further claimed that the MNOs profits would be so severely reduced by MVNO competition that the MNO would not continue to have the financial resources to invest in innovative network developments, which will be damaging to consumers in the long run. Fastlink also requested the TRC to study the possible number of organizations that should be able to operate in Jordan with respect to population, country area, network deployment, current penetration, prices and the level of competition. Umniah: Umniah stressed that the basis of the relationship between MNOs on the one hand and MVNOs on the other, if such relationship shall exist, is purely a commercial relationship based on commercial negotiations. Therefore, Umniah believes that the current regulatory regime should be sufficient and that no specific remedies are needed. If certain regulatory documents such as the Numbering Plan should be amended to allow that, then the TRC is capable of identifying all such documents that need to be corrected.

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XPress: XPress agrees with the TRC that MVNOs can be differentiated according to the degree of mobile network unbundling involved, and this should be kept open and subject to technical and commercial feasibility. However, XPress is totally against the TRC mandating commercial matters such as the products proposed and market segments targeted. These are commercial matters and belong entirely to the (potential) MVNOs in agreement with the concerned MNO. XPress notes that barriers to establishment could be limited capacities and facilities, technical or commercial unfeasibility and limited scarce resources. i2: i2 believes that a simple Reseller is not appropriate since the said model will not allow the TRC or Jordan to achieve the clearly stated objectives: price competitiveness, better products, focus, employment, investments. Instead, i2 recommends the Enhanced Service Provider (ESP), which provides independent pricing and tariffs, its own mobile network code, its own branded SIMs, and subscriber ownership. i2 stated that this would be the most common and successful MVNO model as it will bring differentiated value to all the stake holders. i2 added that such a model reflects a mood and a spirit of cooperation between the MVNO and the Host Network Operator (HNO) limiting the perception of threat that might be felt by the HNO, making an optimal usage of the extra capacity of HNO, and ultimately leading to reasonable CAPEX and OPEX with the agility of a medium structure focused on marketing, sales, customer care and differentiation. i2 believes that TRC should leave it to market forces to negotiate the best model. However the TRC should legally enable the move from one model to another upon agreement between the HNO and MVNO. TRC could play in this case the role of Legal Arbitrator in case of conflict. Moobility: Moobility set out some key elements on which the MVNO concept depends, such as: (1) the MVNO would normally be own-branded, (2) MVNOs do not have a licence to use radio spectrum, but use the air interface(s) and possibly the network of one or more MNOs and are able to offer services using such networks, (3) MVNOs would normally issue their own SIM (Subscriber Identity Module) cards in place of those issued by the mobile network operators. It was also recommend that the TRC should not prescribe MVNOs to invest in specific network elements (apart from Subscriber Identity Module (SIM) cards). Moreover, Moobility identified some potential barriers facing the various types of MVNOs including: (1) The reluctance or inertia of some MNOs to accept MVNOs onto their networks, (2) No or discriminatory access to subscriber numbers, (3) The inability of an MVNO to co-locate key elements of its infrastructure within an MNOs existing facilities (on fair and reasonable terms, including site access), (4) Excessively high access (wholesale) prices, (5) Any form of retail tariff approval mechanism or other form of retail price control, (6) The absence of strong laws prohibiting classic anti-competitive behaviours by MNOs possessing market power, which laws can be quickly and effectively enforced, (7) The absence of effective and speedy alternative dispute resolution mechanisms. Bell Jordan: Bell Jordan stated that MVNO's typically do not have their own infrastructure, but some leading providers are actually deploying their own Mobile Switching Centres

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(MSC) and even Service Control Points (SCP) in some cases. However, leading MVNO's typically deploy their own mobile IN infrastructure in order to facilitate the means to offer value-added services. Bell Jordan referred to different types of MVNO: 1) Service Providers or "SP" which resells an MNOs services under the SPs own brand; 2) Enhanced Service Providers or "ESP" which has control over a few network elements, thus providing a degree of control over the service rendered; and 3) Full MVNOs which control all mobile network elements, except radio access. Moreover, Bell Jordan identified some specific MVNO characteristics, which are: (1) Degree of control over subscribers, (2) Ownership of a portion of the radio subsystem, (3) Interconnection or preferred commercial agreement with one or several mobile network operators. Bell Jordan indicated that a full MVNO would have the following: (1) Network Infrastructure; (2) Control Infrastructure (HLR, MSC); (3) OSS (Operation support system) & BSS (Business support system); (4) ISS (Information support system), while other types of MVNO would have full control over the SIM card, branding, marketing, billing, and customer care operations only. It was also noted that while sometimes offering operational support systems (OSS) and business support systems (BSS) to support the MVNO, the MNO must keep its own OSS/BSS processes and procedures separate and distinct from those provided to the MVNO.

TRC conclusions: All parties' comments have been noted, and the TRC will describe the term MVNO as an operator, which may own infrastructure, that is licensed to resell mobile services under its own name using the network and air interface, in full or in part, of other licensed Public Mobile Wireless Services operator(s). Further the TRC concludes that an MVNO may have: (1) the full responsibility for the relationship with its subscribers including but not limited to the use of standard customer contracts, provision of customer care services, and billing; and (2) differentiated tariff schemes and business strategies from those of its host mobile network operator. The TRC accepts that different types of business model may fall under the MVNO category according to the extent of the use of systems and infrastructure of the MNO.

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Q2: TRC welcomes comments on what specific benefits would be provided if MVNO services are available on mobile networks in Jordan. Jordan Telecom (JT): JT stated that in the absence of independent market studies confirming the number of subscribers reported by the MNOs, any analysis regarding the benefit of MVNO would not be reliable. However, JT added that in theory the entry of MVNO would stimulate competition in the mobile market in Jordan because the cost of entry is lower, the risk of cost duplication is mitigated, and MVNO will help to deliver economies of scale and scope. JT added that as far as Customer Service is concerned, MVNO would offer significant scope for differentiation and improvement because such developments are relatively low cost since it is not associated with network deployment, and therefore, would play an important role in the competitive process. JT also added that whilst there is some competition benefit in an innovative service pricing, more competitive tariff products enjoyed by consumers in more competitive international markets are limited. Fastlink: Fastlink believes that the MVNO will not provide any specific benefits to Jordan claiming that government policy has already been achieved regarding competition in pricing and deployment, and that the current level of mobile penetration in Jordan is high, and allowing additional operators in Jordan will only dilute value and create a crowding out effect. Instead, Fastlink mentioned some disadvantages of MVNO, such as the security concerns of giving an outsider access to the HNOs core network, the revenues that the operator will be deprived from, and the problems of MVNOs in constructing a coherent business case due to the high costs involved and consequently less services differentiation. Fastlink added that there should not be any relation between dominance (or SMP) and providing service to a Virtual Network Operator since it is a pure commercial agreement between MNO and MVNO, and recommends that the TRC should review the market on yearly basis. Umniah: Umniah believes that the introduction of MVNOs will eventually harm the markets at both ends: demand and supply. This is because (1) the Jordanian market is currently enjoying high levels of choice when it comes to mobile services despite the low GDP in Jordan compared with other countries in the region; (2) decreasing retail prices of mobile services will result in increased costs to MNOs due to aniticipated high rates of churn, especially in a saturated market like the Jordanian mobile market, which will force the existing operators to increase their expenditure on customer acquisition and retention; and (3) this will lead the operators to focus on those two commercial areas rather than the technical area, which is the core of the quality of the mobile services. XPress: XPress believes that the introduction of MVNOs will not provide any additional benefits to the market or the consumer, since the market is already fully competitive, and the Jordanian consumers are already enjoying the benefits derived by competition. XPress stated that the introduction of MVNOs might jeopardize the return on investment and the feasibility of the current investments in the Jordanian Telecom market. They added, all markets (vertical and horizontal) are geographically

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fully covered by the current operators, and as such there is no need to introduce MVNOs to cover other markets. XPress requests that any introduction of regulated MVNOs to the Jordanian market should be preceded by adequate cost-benefit analysis to be published to all stakeholders, since success of MVNOs lies solely on the margins of the retail prices, and MVNOs operating margins are far lower than those of MNOs due to the fact that they pay out a large proportion of their revenues in fixed agreement wholesale fees to network operators; the margins will be at risk if retail prices fall. i2: i2 stated that if the MVNO is properly carrying out its job and has a real understanding of the telecommunications industry and the local market dynamics, the benefits will be at four levels: consumer level, country and employment level, HNO level, and MVNO level. Moobility: Moobility stated that MVNO will bring the following benefits to Jordan: (1) Increased choice of service provider; (2) Wider range of services; and (3) Lower retail prices. Bell Jordan: Bell Jordan stated that MVNO can offer its own advanced and differentiated services based on exploitation of their own intelligent network infrastructure. They added that the goal of offering value-added services is to differentiate versus the incumbent mobile operator, allowing for customer acquisition and preventing the MVNO from needing to compete on the basis of price alone. They added that MVNO can play a perfect role in the market if the MVNO is afforded good privileges and the customer can't differentiate whether the MVNO is an operator or reseller, and it will increase the competency in the market under the conditions that control the rates and selling methods. Therefore, MVNO would broaden the customer base for MNO (sell additional MOU's) at a zero cost of acquisition, encourage competition, which would ultimately lead to greater choice and lower prices.

TRC conclusions: Although the fact that some comments were not supportive, the TRC believes that the introduction of MVNO will contribute to the development of the resale market and competition for retail services in Jordan which, in turn, will significantly contribute to the establishment of effective competition. Moreover, the introduction of MVNO elsewhere has proven to be successful in providing the consumers with advanced, low cost, and greater choice mobile service. Therefore, MVNO can be seen as a natural progression towards enhancing free market principles, a further contribution to the efficient use of existing telecommunication infrastructures within Jordan, and a promotion of more service-based competition.

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Q3: The TRC welcomes comments on the most appropriate regulatory approach to be adopted for the development of MVNO in Jordan. Jordan Telecom (JT): JT proposed that MVNO applicants shall meet a minimum set of requirements (i.e. background and experience in the Telecom Market, bank guarantee, feesetc.) to be eligible for providing MVNO services. Only MNVO's obtaining the authorisation to provide MVNO services, would be eligible to negotiate commercial arrangements with HNOs. Fastlink: Fastlink stressed that there is no market failure that requires any remedy, including MVNO, and ex-ante regulation is only required in the presence of market failure. Therefore, Fastlink believes that MNOs should not be obliged to entertain requests from an MVNO unless they can reach a commercial agreement and no regulatory intervention to facilitate the establishment of MVNO agreements should exist. Fastlink stressed that the only protection required for MVNOs is that the agreements must be non-discriminatory as in Spain, Italy and Germany. Fastlink urge the TRC to study the competitiveness of the mobile market and the impact of MVNOs in promoting competition in the market before taking any further step with regards to MVNO to save time and efforts if MVNO is not applicable in Jordan market. Fastlink also noted that it is a worldwide practice that the MVNO agreement is not regulated and is a pure commercial agreement. If the market is not ready for MVNO entrance then it is worth waiting until the market becomes more mature and let the market mechanisms and economic tools steer this objective. Fastlink also referred that there is already a high level of competition in the market taking into account the current mobile penetration rate and level of ARPU & tariffs, which show that mobile subscription is becoming more and more feasible for all segments of the market. Umniah: Although Umniah has its reservations regarding the introduction of MVNOs, Umniah supports the option of letting commercial negotiations be the determining factor of the relationship between MNOs and MVNOs. XPress: XPress stated that the TRC should not impose any regulatory requirements on existing operators to provide access. XPress believes that agreements between the Network Operators and the MVNO should be solely commercial. i2: i2 recommends that the TRC should be a facilitator/arbitrator whereby TRC intervenes only in cases where the market fails to reach a viable commercial agreement and the imposition of appropriate obligations to allow the establishment of MVNO is necessary. Although TRC role is to regulate and remove entry barriers (if any) to the interested party, it needs to set the criteria of successful factors required for the parties to succeed; that may be created by the Integrated Licensing and Regulatory Regime to enable a fertile environment for the development of MVNO activity.

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Moobility: Moobility stated that without a mandatory access right to MVNOs, and a concomitant access obligation on MNOs, the MVNO concept will likely fail or just be implemented in a perfunctory manner. Moobility cited some regulatory aspects that need to be addressed such as: (1) The traffic of the customers of the MVNO must be handled by an MNO on a non-discriminatory basis compared with traffic of the customers of the MNO itself or its affiliated resellers or other MVNO; (2) The MNOs wholesale department should be prohibited from passing competitively sensitive information received from the MVNO to the MNOs own retail operations; (3) Number allocations of customer numbers and network codes; (4) Access pricing principles; (5) Co-location; (6) Retail pricing freedom; (7) Adequacy of general competition law and telecoms specific competition Safeguards; (8) Effective dispute resolution mechanisms; and (9) Minimum licence pre-qualification criteria. TRC conclusions: The majority of comments indicated that the light-handed regulatory approach is the best and most efficient approach to be adopted for the implementation of MVNO in Jordan. Any entity providing MVNO services shall be considered as a Public Telecommunications Service Provider as defined by Article 2 of the Telecommunications Law. Thus, it shall be licensed according to the current licensing regime and therefore it is obliged to adhere to current licensing conditions and requirements and any regulations issued by the TRC. The TRC shall only play the role of facilitator on commercial negotiations. Therefore, the TRC shall only oblige the MNOs to negotiate with the licensees intending to provide MVNO services in good faith and it a timely manner. Therefore, licensees are free to negotiate the model of MVNO operations that best fulfils their interest and business strategies. As a result, it is the MVNOs duty to present to the MNO a viable business case that achieves such objective. The TRC shall only intervene in case of evidence that such negotiations are not conducted in good faith and/or the MNO is unnecessarily withholding negotiations and agreement with the MVNO. Moreover, such operational / commercial agreement shall be filed to the TRC for approval. The intention of this approval is to make sure that such agreements are not in violation of applicable law, applicable Regulations and the terms of their Licence Agreements. The TRC shall only intervene during the course on negotiations in case of evidence that negotiations are not conducted in good faith and/or the MNO is unnecessarily withholding negotiations and agreement with the MVNO. Any MVNO model shall be determined by commercial negotiation between the MNO and the potential MVNOs. However, MVNOs are free to use any identified Interconnection services provided that such services are implemented in accordance with the terms and conditions of their licence agreement and the Interconnection Instructions. Any other services shall be subject to commercial negotiations. Such agreements shall be submitted to the TRC for approval. Traffic generated by the subscribers of the MVNO on the host MNO network is not currently considered within

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the scope of the current Interconnections Instructions. Therefore, it shall be subject to commercial negotiations. The TRC shall continually review the Telecommunications market. Any necessary additional obligations placed on MNOs to provide access to the underlying networks, services and facilities by service-based operators shall only be imposed on MNOs after appropriate market reviews. Moreover, the TRC shall also consider such access services when determining appropriate wholesale remedies with respect to operators that have dominant power in relevant markets. The TRC, before applying any remedies to MNOs that are related to the provision of MVNO services, shall consider both the benefits to consumers of mobile services that might result from such regulatory actions, and the effect on existing mobile service operators and their customers, while taking care not to undermine the incentives for MNOs to continue building their networks. For greater certainty, any regulatory intervention from TRC shall be justified and be critically dependent upon an assessment of a number of consumer, economic, competition and legal considerations. From an economic perspective, TRC would take into account the competitiveness of the mobile market and the impact of MVNOs on promoting competition in the market.

Q4: The TRC welcomes comments on whether in the absence of commercial agreement between MVNOs and Host Network Operators there is a basis for requiring mobile network operators to supply MVNO services? Jordan Telecom (JT): JT recommends commercial agreements between HNO and MVNO as the sole framework and rejects regulatory intervention in this field. Fastlink: Fastlink stated that MVNO is a pure commercial agreement and that there is no logic for regulatory intervention in the regulation of the relationship between infrastructurebased operator and a MVNO. They also added that MVNO should be reselling wholesale minutes that have been purchased from an existing MNO, and therefore services provided by MVNO should be based on retail tariffs and not on interconnection tariffs. Umniah: Umniah reaffirmed its position that commercial negotiations and market mechanisms, taking into consideration the legislative and regulatory environment, should be the drivers to such a relationship. XPress: XPress reaffirms its position that the commercial agreements should govern the relation between the MNO and the MVNO and provided an example on how Virgin Mobile has been introduced in the UK. i2:

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i2 recommends that the TRC should enforce the implementation of MVNO business with mobile telecommunications operators by giving them a reasonable timeframe to implement it. In the event the MNO continues to argue the justification for an MVNO, i2 recommends that the TRC puts in place an Arbitrators Committee from neutral third parties to assess the situation based on clear criteria that shall allow the achievement of the TRCs objectives. The Arbitrators Committee shall be able to assess under 30 days the viability of the MVNO business presented to the HNO based on a clear business plan, vision, strategy, etc. and meetings with HNO and MVNO. Moobility: Moobility argued that in the absence of some form of regulatory oversight, international experience demonstrates that some MNOs might be reluctant to discuss providing services where the provision of such services will compete with their own retail services and, accordingly, will not always enter into commercial negotiation with the generality of potential MVNOs voluntarily. Moreover, Moobility stated some MVNO access principles: (1) Cost plus access pricing; (2) MNO per-second charging for access; and (3) Revenue sharing for all calls delivered to the MVNOs customers. Moobility added that reliance upon general consumer protection and competition law, with redress available only through the court system, would likely prove inadequate as a process to effectively enable and support MVNOs.

TRC conclusions: Please refer to TRC conclusions in response to Question 3 above. Any operating / commercial agreements between the MVNO and the MNO shall contain provisions related to dispute resolution mechanisms. If the parties fail to resolve any dispute or difference arising between them relating to or arising out of any agreement approved by the TRC, then such dispute shall be resolved in accordance with the Dispute Resolution Instructions.

Q5: Which elements constitute parts of the access to the air segment service and which are similar to interconnection services. Jordan Telecom (JT): JT stated that the air-side economics will only be relevant if the MVNO in question seeks to provide their own backhaul from base station sites. JT believes that will be determined by the relative costs of building or leasing backhaul services from both the mobile network operators and other infrastructure providers, therefore, the question is one which should be left to be determined by the market. Umniah: Umniah does not support the categorisation of services as ("access to the air segment" and "the services that are similar to the interconnection services"). Umniah argues that this distinction might confuse the "commercial negotiations" principle as the main driver of the relationship.

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XPress: XPress stated that mobile licensees are currently obliged or allowed to offer some types of MVNO services, such as call origination, premium services and CS/CPS under the interconnection instructions; no further regulatory intervention is necessary nor justified. i2: i2 believes that the HNO shall provide its core network (network systems and subsystems); since the HNO shall be the access between the MVNO and its subscribers, this includes interconnect between domestic networks. They added that, to the foreign networks, including both national and international roaming, the MVNO subscribers appear to be the subs of the HNO. i2 added that the HNO acts as a gateway between the MVNO and the outside world in terms of access and this should be covered by a commercial agreement where the HNO shall pay all the revenue from any incoming traffic into the network minus its share which was agreed upon for providing the access. i2 believes that the MVNO can deploy the necessary BI systems to monitor all TAP files and CDRs for reconciliation purposes. Moobility: Moobility demonstrated that the required services will depend on the type of MVNO that is being implemented: (1) For an MVNO with limited infrastructure, Interconnection Services and National Roaming are not required, while some Other Services will be required; (2) For an MVNO with its own network elements, the Interconnection Services, National Roaming and Other Services are required; and (3) For a Full MVNO, only the Interconnection Services and National Roaming are required, while all Other Services are produced by the Full MVNO itself. Moobility added that as no further spectrum allocation is directly required by MVNOs, no direct scarce resource issue arises in relation to the existing spectrum. TRC conclusions: The required services depend on the type of MVNO implemented. Thus, the services to be supplied / taken, including interconnection services, shall be left for negotiation between the MNO and the MVNO to identify and agree. Therefore, no regulatory intervention is needed in this area. See also TRC conclusions in response to Question 3 above.

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Q6: The TRC welcomes comments on the type of licence that should be applied to MVNO service operators in light of the scarce resources that may be required? Jordan Telecom (JT): Jordan Telecom (JT) considers that MVNO's are resellers of the host MNO services, obtaining any kind of permission from the TRC for MVNO's to offer their services should be sufficient as far as the TRC makes sure that the minimum requirements (i.e. background and experience in the Telecom Market, bank guarantee, feesetc.) for the MVNO are set to prevent easy entrance and easy exist from the market and consequently any market distortion. Umniah: Umnaih stated that Article (20) of the Telecommunications Law does not apply and MVNOs should not be licensed by the TRC since it does not own its own spectrum, does not operate radio network, do not deploy equipment that sends/receives telecommunications messages, and are completely dependent on the MNOs continuous supply of mobile service thus MVNOs cannot be considered as Public Telecommunications Service Provider. XPress: XPress confirmed that all agreements between MNOs and MVNOs should be purely commercial and all elements and services between both parties commercially negotiated. XPress added that should the MVNO wish to negotiate services and agreements under the umbrella of the interconnection instructions, it should apply for a class or individual licence under the new licensing regime. i2: i2 believes that most committed MVNOs would expect (where possible and permitted by the TRC) to own their own numbering range. i2 stated that this will help the MVNO to differentiate itself from the HNO and gives it a level of perceived independence. At the same time and by definition, the MVNO shall not own any of the other scarce resource (spectrum and rights of public access). i2 also believes that an "Enhanced Class Licence" is a fair classification of MVNO and allows it to own its own numbering range. However, i2 argued that allocation of numbers should be in blocks of 100,000. They added that the TRC should allow MVNOs to enter interconnection agreements with MNOs, and shall allocate a range of numbers to MVNO till the issuance of any licence in order to facilitate the launch of MVNO. Moobility: Moobility recommends that a light touch general authorisation or class licensing regime, similar to that implemented for other forms of service provision in Jordan, appears appropriate and adequate for MVNOs, subject only to adequate regulatory safeguards being in place to address the TRCs other specific concerns. TRC conclusions: The MVNO is a provider of Public Telecommunication Service (as defined by the Telecommunications Law) and any party intending to provide MVNO services is required to apply for and receive a Licence in accordance with the current licensing and regulatory regime.

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Furthermore, in light of the current National Numbering Plan and the Regulations for allocation and reservation of numbering capacity, sub-allocation of numbers by MNO to the MVNO is not allowed; reservations and allocations of numbers capacity shall only be administered by the TRC, numbers shall not be traded and can not be transferred between allocated parties. Thus, any potential MVNO shall apply separately for its own numbering capacity in accordance with current Instruction for Allocation and Reservation of Numbering Capacity. Therefore, an Individual Licence shall be required by any entity intending to provide MVNO services.

Q7: The TRC welcomes comments on the potential demand and appropriateness of the allocation of MNC to organizations other than PMTO in order to be able to take appropriate regulatory decision (if necessary). Jordan Telecom (JT): JT believes that the TRC should make allowances for a large number of MVNOs applying for MNCs to ensure that a lack of processes to award scarce resources does not result in market failure. Umniah: Umniah believes that no MNCs should be allocated to organizations other than PMTOs since they are not licensed as mobile operators. XPress: XPress stated that a MNC should be allocated to a PMTO only, and not any other organization. Especially since any brand issues can be resolved through the use of special SIM card kits. i2: i2 believes that it is right and proper that an MVNO be allocated an MNC and that the TRC should provide such a service to MVNOs. i2 argues that having its own MNC assists the MVNO to build its own brand image. Moobility: Moobility states that it may be necessary to amend the National Numbering Plan and related regulations to facilitate the allocation to MVNOs of MNCs.

TRC conclusions: The TRC disagrees with the view of the majority of the respondent that MNC's should not be allocated to organisations other than PMTOs. The TRC believes that allocation of MNCs to MVNOs shall facilitate the introduction of advanced types of MVNOs which have the capacity to authenticate a roamed subscriber (i.e.: MVNOs having their own Home Location Register (HLR), switching capacity and an authentication centre). This shall ensure that more services and options are available to the end user.

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Q8: The TRC welcomes comments on whether some modifications are required to the allocation rules to ensure a continued and efficient use of numbers. Jordan Telecom (JT): JT believes that allocating special range of numbers for MVNO's which is acquired by the HNO on behalf of the MVNO according to a special commercial agreement is preferrable. Umniah: Umniahs view is that resellers are just big customers or alternatively, they act as a channel to reach the customer. Therefore, Umniah claims that allocating numbers to resellers would not constitute a breach to the "Right of Use" to the customer condition mentioned in Schedule G of the Individual Licence. XPress: XPress stated that Number Blocks are scarce recourses and should be awarded to individual licensees only, however the TRC should introduce the necessary amendments to the Individual Licenses and the National Numbering Plan to allow secondary allocation of numbers from the host network to the MVNO or interested party. i2: i2 strongly believes that some appropriate modifications are required to the allocation rules such that allocation of numbers of 100,000 to the MVNO and allow the transfer of the numbering range made by HNO to MVNO at the first stage to MVNO and directly by TRC at later stage. Moobility: Moobility stated that non-discriminatory allocation of mobile subscriber numbers is a fundamental enabler for MVNOs, and clear blocks of 100,000 would be a more efficient minimum allocation, either directly from the TRC or indirectly as sub-blocks from the host MNO. On the other hand, they strongly encourage the TRC to ensure Mobile number Portability (MNP) is implemented for MVNOs at the outset as a facilitator of competition. TRC conclusions: Schedule G of the Individual Licence Agreement makes reference to the licensee and the customer and the transfer of the Right to Use numbers rather than a transfer of ownership, there is no reference to the use of numbers within an allocation by resellers. Moreover, in accordance with the current National Numbering Plan and the regulations for allocation and reservation of numbering capacity, sub-allocation of numbers by MNO to the MVNO is not allowed, reservations and allocations of numbers capacity shall only be administered by the TRC. Currently, number capacity is only allocated in blocks However, the TRC agrees with i2 and Mobility's comments. be allocated to MVNOs in blocks of 100,000 numbers designated for Cellular Mobile Radio Telephone Services NNP. of 1.000.000 numbers. Therefore, numbers will from number capacity in accordance with the

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Q9: TRC is seeking feedback if some of the regulatory instruments have to be revisited to ensure that there is adequate provision to at best prevent and at worst minimise the opportunity for Win-back within an MVNO scenario. Jordan Telecom (JT): JT stated that The Competition Safeguards are sufficient in their detailing of anticompetitive behaviours. However, ex ante regulations will not prevent abusive operators from attempting to cheat the market without negatively impacting the efficiency of the MVNO to operate freely. Umniah: Umniah stated that it is of the view that if MVNOs are based on commercial agreements, there is no threat of "win back" campaigns. It also elaborated that the relationship between the MVNO and the MNO would be symbiotic (win win) such as when the MVNO can provide retail services at a discount to what the MNO would otherwise have to incur on its own and MVNOs can also develop new market segments by tailoring services for particular groups of customers. XPress: XPress stated that commercial agreements results in a win/win situation where the misuse of confidential information and win-back campaigns are not in the best interest of any party. Furthermore, they added any exchange of confidential information between two parties is usually covered under Non- Disclosure Agreements. It also noted that the motivation for MNOs to deal with prospective MVNOs varies. In general, they have allowed MVNOs to participate in strategies aimed at specific customer segments, to potentially reduce churn (using a partners brand) through affinity marketing, to access wholesale incremental revenue streams, or to further leverage fixed investments. It is also not uncommon for the operator to take a stake in the MVNO examples include Virgin Mobiles original deal with Mercury One2One and Tescos 50:50 joint ventures with O2 in the UK. i2: i2 stated that since customers are granted the chance to choose its service provider, operators can always compete to win back lost customers by commercial public offerings and within the allowable rules but within fair business ethics. Therefore, i2 believes that these business ethics and protection of both HNO and MVNO are mostly needed to be established. Moobility: Moobility recommends that a total prohibition, but only for a pre-determined period, is the best way to prevent win-back campaigns from undermining the competitive market, which is consistent with progressive regulation in other countries. TRC conclusions: The TRC agrees with Moobility's response in regard to safeguarding competition within the mobile sub-sector and to protect the interest of all concerned parties.

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Q10: The TRC welcomes comments on the method of establishing the costs associated with the provision of MVNO services by the Host Network Operator. Jordan Telecom (JT): JT stated that, service provisioning to the MVNO by the host MNO should be on a commercial basis and any intervention from the TRC to bring the relation between the MVNO and the HNO closer to cost will most likely damage the incentive to invest in the infrastructure. Fastlink: Fastlink stated that cost associated with the provision of MVNO services by host MNO should be left to market tools and mechanisms. Umniah: Umniah believes that the price will be either above or below what is being proposed based on commercial negotiations, and there is no need for TRC to mandate any prices or any pricing methodologies since an MVNO has four competing operators to choose from through negotiations. XPress: XPress confirmed that all agreements between Network operators and MVNOs, including the associated rates should be purely commercial, no regulatory intervention is justified. i2: i2 believes that such costs should be driven by commercial agreements within allowable guidelines by the TRC, where the TRC can play its role as a mediator should the need arise. They recommend that the TRC introduces the Retail-Minus and in the future, can evaluate the viability of introducing a Cost-Plus model if required. Moobility: Moobility believes that the charging mechanism for MVNOs should be at cost plus prices (based on Long Run Average Incremental Cost (LRAIC)), rather than retail minus. Moobility also believes that access at cost plus prices, in addition to providing for market based competition in call prices, has several other benefits in the mobile market. They believed that it will: (1) permit for the first time in Jordan competition in elements of call conveyance and provide a choice of call routing for customers, (2) enable MVNOs to develop enhanced services and compete with those already provided by MNOs for themselves; and (3) provide some of the inputs for the MVNOs to develop their own services including those services which, in particular, use components from more than one network. Bell Jordan: Bell Jordan stated that many incumbent mobile operators will evaluate the opportunity to offer supplementary MVNO services of their own. To do so, Bell Jordan believes that exiting mobile operators will use their established branding, service knowledge, and supplier relationships to complete against independent MVNO's.

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TRC conclusions: The TRC agrees that any cost associated with the provision of MVNO services by the HNO should be left to market tools and mechanisms. However, if the need for the regulatory intervention arises, the TRC shall introduce a Retail-Minus charging structure on the grounds that to reduce retail prices to levels close to costs is unnecessary in a market which is becoming increasingly competitive. However the TRC can evaluate the viability analysis of introducing other models if required following due consultations.

Q11: The TRC seeks feedback whether it needs to make provisions within the licensing and regulatory regime to safeguard against the effects of cost avoidance or should this be left to market forces. Jordan Telecom (JT): JT stated that market forces are extremely likely to punish poor customer service provided customers are easily able to switch between service providers without penalty. In this respect, JT added that the current number portability obligations should be extended to MVNOs. Umniah: Umniah claimed that MVNOs will not be subject to the QoS Instructions that emphasises public reporting, and hence will have no incentives to compete on the basis of better quality especially in a market as price-sensitive as the Jordanian mobile market. It also believed that the TRC should leave this to market forces to be the driver in this regard since this will provide the consumer with more options. So, Umniah expects that the consumer will decide on what sort of quality s/he would like to purchase. XPress: XPress believes that due to the high level of competition in the market, all quality related issues should be left to market forces. Theres no need for any regulatory intervention to safeguard against the effects of cost avoidance, if any. i2: i2 recommends that the commercial agreement between host MNO and MVNO shall includes different SLAs, one of them is related to the quality of network and other elements used by MVNO and under the control of the HNO. Moreover, they did not recommend specific regulation regarding this point since the market itself will penalize the defaulters. Moobility: Moobility believes that since MVNOs from a customer perspective are identical to MNOs, the MVNOs should fulfil the same Quality of Service (QoS) obligations as the MNOs.

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TRC conclusions: In order to ensure that a reliable mobile service is being offered to consumers, the TRC concludes that both the MVNO and the MNO shall negotiate their operating / commercial agreement so as to ensure that the QoS obligations for Public Mobile Services are fully met, which could be accomplished through an SLA.

Q12: TRC would welcome views on possible technical implementation schemes in which MVNOs may use elements of the mobile networks facilities. Jordan Telecom (JT): JT recommends that it would appear most appropriate to let such schemes be determined by the parties negotiating the arrangements provided the market position of the incumbent infrastructure operator is not abused. Umniah: Umniah does not anticipate any investment in any of the network components since there is absolutely no value to the economies or consumers that can be gained from duplicate investment and therefore believes that it should be left completely for commercial negotiations. XPress: XPress believes any such technical details should be commercially negotiated between both parties and subject to technical and commercial feasibility especially since current network operators capacities and design is based on the network operators business plan for its own operations. i2: i2 believes that this should be left to the host MNO and MVNO to agree on the scope of the network elements, platforms and systems that will be used by the MVNO and provided by host MNO according to specific business model. i2 also recommends that such agreements shall include some guidelines / SLA that clearly state the functionalities and elements of MNO platforms to be used and the conditions / responsibilities of both the MNO and the MVNO when an upgrade / enhancement of one or many of used platforms is being requested or expected by MVNO. Moobility: Moobility stated that the MVNO would need the host MNO to provide services for the functions controlled by network elements, which are not available to the MVNO. TRC conclusions: In light of the majority of the comments received, the possible technical implementation schemes will be left for commercial negotiation.

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Q13: TRC would welcome comments on what will the MVNOs require of the mobile network operators' facilities. Jordan Telecom (JT): JT stated that this should be subject to the commercial agreement between the MVNO and host MNO as it depends on the operational and business model that the MVNO is keen to adopt and the willingness of the host MNO with regards to providing an access to those facilities. Umniah: Umniah stated that this totally depends on the model that the MVNO chooses to have and then on the negotiations with the MNOs. The MNOs have all the facilities necessary for running an MNO as well as an MVNO. XPress: XPress believes any such technical details should be commercially negotiated between both parties and subject to technical and commercial feasibility especially since current network operators capacities and design is based on the network operators business plan for its own operations. i2: i2 stated that there are minimum expectations in terms of radio access etc. that must be granted. The other elements shall be left for the negotiation with the principle of migration possibility from one set to another. i2 believes that MVNO will benefit from all the functionality of the offered systems and its upgrades and enhancements is determined during the course of negotiation with the HNO. The cost of each used part of the infrastructure of the host MNO by the MVNO shall be stated in details making the migration transparent and the attached cost for the MVNO specified. They added that the TRC can play a role to ensure the fair play status is maintained during the negotiation. Moobility: Moobility believes that the integration between MVNO and MNO should be standards-based, i.e. using MAP/SS7 for messaging, CAMEL Phase 2 for prepaid services, TCP/IP socket for provisioning etc. TRC conclusions: The TRC agrees that this issue should be left to commercial negotiation. However, it is in the interests of both parties that any operational / commercial agreement between the MNO and the MVNO shall include the procedure, processes and the attached costs that is to be applied when an update or enhancement to the MNO or MVNO facilities and system is implemented, or in case of migration from one set of elements to another.

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Q14: Should there be any restriction placed on the number of MVNO operators licensed and on what basis? Should a single MVNO sign commercial agreements with several mobile network operators? Jordan Telecom (JT): JT stated that the TRC should neither set a limit on the number of potential MVNOs nor on the number of commercial agreements should they enter into as far as the relationship between the two parties is regulated through a commercial agreement. However, JT believes that the TRC should restrict the entrants into the MVNO Market to those with previous relative experience within the mobile industry to prevent parties coming from other industries (i.e. Financial institution, FMCG retailers etc ) from entering the mobile market and having an accordingly negative effect on market and industry dynamics due to the lack of the required and essential expertise. Umniah: Umniah believes that the TRC should not set minimum nor maximum numbers of MVNOs to operate in the market and this should be left to market forces to determine. Umniah further added that the number of commercial agreements that the MVNO can sign with MNOs should be left for market forces to decide upon as well. Moreover, it also noted that imposing any limitations on MVNOs will very likely lead to strengthening the dominant operators' positions while weakening that of the new entrants as the networks of the dominant operators seem to be more appealing to MVNOs. XPress: XPress stated that all agreements between Network operators and MVNOs should be purely commercial; as such there is no need for MVNOs to be licensed by the TRC, and added that the number of agreements signed by the MVNO should be left to the discretion of the MVNO with no limits imposed. i2: i2 recommends that the TRC allows a limited number of MVNOs for the first five years, and based on the market realities to adjust accordingly to further open this space to more players if required. On the possibility of MVNO having multiple HNO, they recommend a kind of reciprocity between HNO and MVNO. They added that in a market like Jordan, they do not think at a first stage that multiple marriages are possible. They expect that this may occur later on as the MVNO business becomes mature. However, i2 stated that they have no issue on an open market with multiple partnering both ways, but their main concern is that it should not be possible for the HNO to sign multiple MVNO and for an MVNO to be stuck with only one HNO. Moobility: Moobility believes that there should be no need for artificial restrictions on the number of MVNOs permitted, subject to meeting certain minimum threshold requirements. They added that multiple MVNOs on a single network should be possible and similarly, that a single MVNO should be able to roam between MNOs subject to technical and other practical feasibility issues.

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TRC conclusions: There will no undue restriction upon the number of individual licensees intending to provide MVNO services. However, the TRC shall not oblige the MNO to provide access to its underlying network infrastructure, telecommunications systems and facilities. This is to ensure that a viable business case has been presented by the potential MVNO and that the MVNO model negotiated fulfils both the MNO and MVNO interests and business strategies. For more details, please review TRC's response to questions (3) above.

Q15: Current PMTOs pay 10% revenue share to the Government, how should the formula for revenue share be implemented for MVNO? Jordan Telecom (JT): JT stated that given that MVNOs are not utilising spectrum and provided the number of MVNOs remains unlimited, no revenue share should be applied. Umniah: Umniah stated that the Government will only collect the 10% from the MNO, but the MNO will collect some of it from the MVNO in proportion to the services that are provided to the MVNO, therefore, any further taxation would only be a duplication, which does not coincide with international fiscal practices. XPress: XPress stated that the TRC should introduce the appropriate remedies to the licenses of the Public Mobile Wireless Operators to remove the 10% revenue share obligation, and added that such a remedy would ensure fairness and just competition. i2: i2 recommends for the success of the MVNO, there should be a subsidised and/or lower level of revenue share by the government especially as the MVNO is not using the scarce resource base as the PMTO. i2s main concern is due to fact that MVNO margin is much lower that MNO due to revenue share retained by the government and much lower number of subscribers, and therefore it is highly sensitive and at risk. Moobility: Moobility believes that the TRC should aim to move away from pure royalty based fees towards the international best practice of only charging licence fees based only the administrative costs of the TRC necessary in regulating the industry. The level of fees should be based on each licensed entitys net revenues and are applied in a fair and non-discriminatory manner. Moobility believed that any further form of taxation should be one that is applied across the whole economy to all corporations. TRC conclusions: The TRC believes that revenue share obligations shall be extended to MVNOs since they are providing a type of services that is considered as Public Mobile Wireless Service as defined by the TRC.

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Revenue share for MVNOs shall be calculated using the same formula currently applied to MNOs with the term C modified to include any annual aggregate payables by the MVNO to MNOs.

Q16: Is there a need for the development or enforcement of the current Consumer Protection policies, guidelines or instructions to address the issues of Slamming and miss-selling? Jordan Telecom (JT): JT agreed that these guidelines should be applied to MVNOs. Umniah: Umniah stated that the overall legislative environment is modern and it is improving in a rapid way and it believes that the Competition Law, the Consumer Protection Law (which is currently being studied) as well as many other laws in the Kingdom provide protection for both: the consumer and the MNO. XPress: XPress believes that such measures should be handled by the consumer representatives since it does not only apply to telecom services. XPress believes that some form of consumer safeguard against slamming could be implemented but it should be voluntary, as the case with Ofcom (UK) for the fixed line telecom services. XPress noted that the basis for the TRC's involvement should be to ensure that the regulatory environment provides appropriate safeguards to protect the interests of citizens and consumers as well as the reputation of the industry as a whole. i2: i2 recommends that that MVNO shall comply with the same existing regulations that apply to MNOs. Moobility: Moobility considers that no additional consumer protection regulation is required for MVNOs beyond those that already apply to MNOs and agrees that any MNO obligations relating to consumer protection issues should apply equally to MVNOs. TRC conclusions: The current Regulations are considered adequate to safeguard competition and provide fair-play to all licensees within the mobile sub-sector. However, the TRC shall duly work with all concerned parties to enforce any related Regulations and if necessary develop new related regulations to provide any necessary remedy. The TRC shall consult with all interested parties prior to setting any related Regulations. The TRC may intervene should the need arise so as to provide appropriate safeguards to protect the interests of citizens and consumers as well as the reputation of the industry as a whole.

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3 TRC's responses to all comments received to the Draft Regulatory DecisionThe following presents an analysis of the responses received to the Draft Regulatory Decision. Formal responses were received from the following parties: Jordan Telecom (JT) Orange Mobile Fastlink Umniah i2 FRiENDi Mobile Viacloud Gulf Finance House

All comments hereunder are quoted as received. The consultation was related to the wording of the Draft Regulatory Decision to be considered by concerned parties. This analysis of comments follows the structure of the Draft Regulatory Decision and for each Article gives an analysis of the comments received and the TRCs conclusions.

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Article 1.1: This document describes the regulatory framework that is intended to formally govern the provision of MVNO Services in Jordan. It sets out the TRC's views, following the assessment of the comments received to the public consultation on implementation of MVNO, on the most appropriate regulatory approach for the introduction, regulation and provisioning of such services, and its plans to work with licensees to ensure adequate provisioning of Public Mobile Wireless Services by MVNOs. Jordan Telecom (JT): Jordan Telecom would like to draw the TRC attention to Article 33 of the newly approved Government Policy which states: "Government requires that the TRC improve its performance in the areas of objectivity, proportionality, consistency and transparency. Specifically, Government requires the TRC to adopt rules so that: With respect to all decisions that are likely to have a material impact on the market, the TRC will engage in a transparent and open process by which all consultations and major submissions made to the TRC will be made publicly available so that others may make their own submissions before decisions are announced; The TRC publish reasoned decisions for all decisions that are likely to have a material impact on the market, setting out not only why the decision was made but also providing the full objective economic and legal analysis that underlies that conclusion, an assessment of the impact on affected parties of the resulting regulatory burdens, as well as the number of votes for and against such measures;" Furthermore; Article 58 of the Government's Policy state that the government encourages the TRC to provide more service based competition on the condition that such services should only be imposed on operators after appropriate market review has been conducted. Jordan Telecom has not till this date received any official market review, research or study nor has it received any official document to scientifically justify the implementation of MVNO in the Jordanian telecommunications market. JT is surprised on how the TRC is reaching its conclusions and would very much like to be included on all the researches or studies that the TRC has based its decisions upon. Failing to do so the TRC will be in violation of the Government's Policy that it is supposed to implement pursuant to the Telecommunications Law. MobileCom: Same as JT's comments. Fastlink: The final phrase of this paragraph talks about TRC's "plans to work with licensees to ensure adequate provisioning of Public Mobile Wireless Services by MVNOs". The word "adequate" could be interpreted in two ways. Either it could refer to an adequate number of MVNOs operating in the market to achieve some, unstated, aim of the TRC, or it could refer to the services provided by MVNOs being adequate, i.e., fit the purpose. We do not believe that the TRC means the first definition of

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"adequate", given its statement in paragraph 3.8.5 and therefore we would interpret adequate to mean ensuring that MVNO services, if any are provided, are fit for purpose. We therefore propose that the TRC amends the wording of this paragraph to read; "plans to work with licensees to ensure Public Mobile Wireless Services provided by MVNOs adequately meet consumer needs". FRiENDi Mobile: FRiENDi mobile generally agrees with the structure and content of the TRCs Draft Decision and wholeheartedly welcomes and supports the TRC on this important procompetition regulatory initiative. FRiENDi mobile believes the innovative and competitive mobile offerings that MVNOs can deliver to the market will bring significant long term welfare benefits for Jordans mobile services consumers and inject new levels of competitive vigour into Jordans telecommunications markets. This important and visionary regulatory initiative of the TRC will undoubtedly serve to maintain Jordans status as the most competitive and liberal communications market in the region.

TRC response: The draft decision concludes the consultation on implementation of MVNO in Jordan and was based on comments and submissions received from main stakeholders and potential MVNOs to that consultation. Submissions made to that consultation and this draft decision show, to some extent, a market demand for that type of services - several entities have already approached the TRC with proposals to provide these services and were showing an interest to invest in the provision of such services in the Jordan Telecommunication market. Moreover, some entities demonstrated their willing to serve, target and attract niche customer segment(s) that are yet to gain the benefits of effective competition. Despite the fact that no appropriate market review is currently available, some submissions made were encouraging and show the need for that type of services in the Jordanian Telecommunications market. Therefore, the TRC believes (based on submission received) that the introduction of MVNO will contribute to the development of the resale market and competition for retail services in Jordan which, in turn, will significantly contribute to the establishment of effective competition and can be seen as a natural progression toward enhancing free market principles, a further contribution to the efficient use of existing telecommunication infrastructure within Jordan, and a promotion of more service-based competition. However, the TRC (in line with the Government Policy) is encouraged to promote facilities-based competition, moreover, it is obliged to publish reasons for any decisions that shall be concluded in this regard and shall continually review the Telecommunications market.

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Consequently, the TRC shall permit the provision of such service in Jordan with minimum regulatory intervention through the adoption of a light regulatory approach with no undue regulatory burdens by allowing market forces to decide on the availability and sustainability of such services. Moreover, any regulatory intervention from TRC (if needed) shall be justified and critically dependent upon an assessment of a number of economic, competition and legal considerations.

Article 1.2: The TRC hereby seeks input from interested parties on the draft decisions on provisioning of MVNO Services in Jordan outlined within this document. The TRC invites consumers; the industry; and other interested parties to submit written comments on any issue that they deem relevant with respect to this document. The views received will help the TRC to prepare a more defined regulatory decision on the provisioning of MVNO Services in Jordan. Interested parties are encouraged to submit their comments to the TRC on or before the deadline stated on the cover page of this document. All comments of the interested parties will be taken into account in the formulation of the final determination, but the TRC is under no obligation to adopt the proposals of any particular party or parties. Jordan Telecom (JT): Jordan Telecom is surprised and disappointed for not including major comments submitted by the industry as a response to the MVNO consultation and which clearly has not been reflected in the Draft Instructions. Furthermore; the TRC did not even justify not taking such comments into consideration. Accordingly, JT is seriously doubting the effectiveness of such a consultation process and believes that the TRC has its own predetermined decisions, in particular on the principle itself that implementing MVNO's in Jordan will not bring any value to the Jordanian end users. MobileCom: Same as JT's comments.

TRC response: Same as conclusion to the Article 1.1 above.

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Article 2.1: The following words and phrases shall have the meanings assigned thereto hereunder, unless the context indicates otherwise. Any words and phrases not defined hereunder shall have the meanings ascribed thereto in the Law and the Regulations issued pursuant thereto: Fastlink: In general, we believe that the definitions in the draft should be aligned with both the Telecommunications Law and existing licenses. i2: Agree with the definition proposed by the TRC.

TRC response: All comments are noted.

Article 2.3: Frequencies mean the radio frequencies assigned to the Licensee for use in the operation of its Licensed Activities, as amended or modified in accordance with TRC Regulations. Fastlink: The definition should be made clearer so that it is stated explicitly that the Licensee who is assigned frequency is the MNO and not the MVNO. As the definition is currently written, it appears to be ambiguous, especially when read in conjunction with 2.7, which is an all inclusive definition of Licensee and therefore includes the MVNO. i2: Agree with the definition proposed by the TRC.

TRC response: This is a generic definition. However MVNO shall be required to obtain a Licence from the TRC in accordance with the Law. Such Licence authorises the Licensee to use frequencies in the operation of its Licensed Activities. Such Licensed Activities will not be the one related to the provision of MVNO services. However, MVNO (as stated in Article 2.11) shall use the air-interfaces of the MNO that enable the utilisation of the frequencies assigned to the MNO in order to provide its MVNO Services. The Term "Frequencies" will not be used in this decision. Therefore, it shall be deleted.

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Article 2.5: Individual Licence means a Licence to provide public telecommunications services and/or operate public telecommunications networks that use in the provision of some or all services or operation of networks Scarce Resources that have not been specifically exempted by the TRC from an Individual Licence requirement. Jordan Telecom (JT): JT believes that the MVNO should not be a licensed operator it should merely get permission or an authorisation to operate within Jordan for a certain fee in line with the expected value of providing Telecom services and without any revenue sharing scheme. The MVNO operations should be governed by the bilateral agreement with the MNO. The MNO should primarily be liable towards the TRC as concerns to all services within the scope of its licence even if the network is shared. Again, any authorisation should only be granted after conducting a proper analysis and evaluation for the business plan presented by the MVNO. MobileCom: Same as JT's comments. Umniah: Instead of copying the definition from the "Instructions Regarding the Application Procedures and Criteria for the Award of Public Telecommunications Individual and Class Licenses", we suggest referring to that definition as Instructions issued by the TRC are subject to amendment. Repeating such definitions might cause confusion in the future in case the same definition is updated in one document and missed in another. Same thing applies to all other repeated definitions (e.g. Interconnection Services, Licensee, Person, etc.) i2: Agree with the definition proposed by the TRC.

TRC response: The MVNO is a provider of Public Telecommunication Service (as defined by the Telecommunications Law) and any party intending to provide MVNO services is required to apply for and receive a Licence in accordance with the Telecommunications Law, and the current licensing and regulatory regime. The TRC agrees with JT that the MNO shall be liable towards the TRC as concerns all services within the scope of its licence even if the network is shared. All other comments are noted.

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Article 2.6: Interconnection Services means the services identified in the Interconnection Instructions that may be provided by interconnected Licensees to each other in accordance with these Instructions. Jordan Telecom (JT): JT believes that the relationship between the MNO and MVNO should only be governed by the bilateral agreement between them. Adapting to the Interconnection Instructions is an obligation on the MNO and not the MVNO. An MVNO is simply an organization that offers mobile subscription and call services to customers but does not have an allocation of spectrum, so basically it should not require a licence, it should merely get a permission to operate. MobileCom: Same as JT's comments. i2: Agree with the definition proposed by the TRC.

TRC response: Kindly review TRC's comments on Article 2.5 above. As stated above, the MVNO shall be licensed. Therefore, it shall also comply with the Interconnection Instructions as appropriate and applicable to it is licensed activities as required by the Telecommunications Law and the licence requirements.

Article 2.7: Licensee means a Person who holds a Licence issued in accordance with the Law. TRC response: This Article becomes: "Licensee means the holder of an Individual Licence or a Class Licence." Moreover, definition for the term "Class Licence" shall be added.

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Article 2.11: Mobile Virtual Network Operator (MVNO) means an operator that is licensed to resell Public Mobile Wireless Services under its own name using the network of, and Frequencies assigned to licensed MNO(s). Jordan Telecom (JT): JT believes that an MVNO should be defined as: An operator that resells Public Mobile Wireless Services under its own brand using the network of, and frequencies assigned to a licensed MNO(s). Furthermore, the MVNO should deal directly to end users to ensure that market disruption does not occur and to ensure that prices to end users are competitive. MobileCom: Same as JT's comments. Fastlink: This definition refers to the MVNO using the Frequencies assigned to the MNO. We do not believe that this is correct. The MVNO has access only to the air interfaces of the MNO, not the frequency itself. This is an important distinction as the MVNO provides a service overlaid on the infrastructure licensed to the MNO. Umniah: The definition should not refer to "sharing" frequencies or infrastructure as MNOs do not share infrastructure nor frequencies directly with MVNOs. Instead radio-network services are bundled and provided to MVNOs. i2: Agree with the definition proposed by the TRC.

TRC response: JT's comments are handled in the response to Article (3.1.1). This Article becomes: "means an operator which may own or control infrastructure and is licensed to resell Public Mobile Wireless Services under its own name using the network, in full or in part, of licensed MNO(s)."

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Article 2.14: Person means any individual, company, corporation, partnership, joint venture, consortium, government or governmental entity. Jordan Telecom (JT): JT suggests deleting "government or governmental entity" from the definition of a person because when defining a Licensee in article 2.7 it was defined as a person which means that a licensee could be a governmental entity and this is unacceptable and in violation with Jordan's WTO obligations. MobileCom: Same as JT's comments. i2: Agree with the definition proposed by the TRC.

TRC response: Comments are noted. Article (2.7) has been redrafted.

Article 3.1.1: The MVNO Services definition shall be considered as an extension to the current definition of Public Mobile Wireless Services as defined by the TRC comprising, but not limited to, the following characteristics: Fastlink: We do not understand why an MVNO Service should be considered as an "extension" to the current definition of a Public Mobile Wireless Service. In our view, an MVNO is a Public Mobile Wireless Service; the only difference being that the MVNO has not own network. This may be a case of misinterpretation; therefore a clarification regarding this statement would be most appreciated.

TRC response: Fastlink's comments have already been covered by responses to Articles (2.11) and (2.12). MVNO Services is the same Public Mobile Wireless Services provided by the MNO but are resold by the MVNO. Therefore, in order to ensure consistency with the definition of MVNO Services provided in Article (2.12) and to remove any unintentional confusion, the phrase "an extension to the current definition of..." shall be deleted.

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The Article becomes: "The MVNO Services as defined in Article 2.12 above could have, but are not limited to, the following characteristics:"

Article 3.1.1.1: Full responsibility of the MVNO for the relationship with its subscribers in accordance with terms and conditions of its Licence Agreement and any related Regulations. Jordan Telecom (JT): Again, the relationship should be governed by the agreement between the MNO and the MVNO as mentioned in our previous comments. MobileCom: Same as JT's comments. i2: Fully agreed. Full responsibility for the relationships with its customers must be the responsibility of the MVNO, including support, customer care, provisioning, billing etc.

TRC response: These comments are noted. However, this Article is related to the relationship between the MVNO and its subscribers which is governed by the terms of the licence agreement and any related regulations.

Article 3.1.1.2: Differentiated tariff schemes and business strategies of MVNO from those of its host Mobile Network Operator. Fastlink: This paragraph appears at the same time both redundant and prescriptive. It is redundant because we would expect any MVNO to be complementary to its host MNO, and so would therefore naturally have a different business strategy and tariff plan. Again we refer to the example of Virgin Mobile in the UK. Therefore, this does not need stating in the Decision. It is also prescriptive as, contrary to the sentiments express in 3.1.2 and 3.8.5, it seeks to prescribe the content of any commercial agreement between the MVNO and the MNO. i2: We also agree on the fact the strategies and pricing policies shall be differentiated from the HNO as long as this is feasible. This will enable the "competition spirit" that is one of the main objectives of the TRC and the MVNO implementation. However,

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we believe that shall not the position the MVNO and its HNO in a "Price War" that will damage the whole market and concept.

TRC response: The purpose of the Article is to clarify part of the characteristics of MVNO services not to decide on it. The Article (3.1.1) has been redrafted to reflect this position although the text of 3.1.1.2 remains unchanged.

Article 3.1.2: MNOs and MVNOs shall be free to negotiate the model that best fulfil their interests and business strategies. Consequently, more than one type of MVNO can be implemented in Jordan depending on how far an MVNO wishes to rely on the facilities of the host MNO, the adopted segmentation of the market and the proposed product sets. Jordan Telecom (JT): JT believes that the MNO should have the full right for refusal or acceptance in starting any negotiations with the MVNO. JT strongly believes that any terms and conditions should be left solely to commercial negotiation between MNOs and potential MVNOs. We do not support regulatory intervention in determining the terms and conditions. Even in circumstances where the MNO and the potential MVNO are unable to reach commercial agreement, we do not believe that regulatory intervention should occur. MobileCom: Same as JT's comments. i2: Totally agree, the spirit of the deregulation will be if the HNO and the MVNO agree to conclude a commercially viable business model provided that a fair play in the market in maintained. FRiENDi Mobile: We respectfully caution that in deciding that entry of MVNOs should be left primarily to market forces and purely commercial negotiation the TRC should nevertheless be completely satisfied that: the legal and regulatory framework remains sufficiently robust in Jordan to guarantee a level playing field in all markets; and genuine in-good-faith commercial negotiations can realistically occur and take place on a fair and non-discriminatory basis.

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TRC response: All comments are noted. However, they are repeatedly made to other Articles. We agree that a fair playing field in the market should be maintained.

Article 3.2.1: The MVNO is a provider of Public Telecommunication Service (as defined within Article 2 of the Telecommunications Law). Thus, any party intending to provide MVNO Services is required to apply for a Licence in accordance with the current licensing and regulatory regime. Jordan Telecom (JT): Based on our before mentioned comments JT rejects Article 3.2 and suggest to grant a permission or an authorisation for MVNOs to operate within Jordan. MobileCom: Same as JT's comments. Fastlink: We do not fully grasp the TRC's position as to the typical Licensing requirements of MVNOs. In line with best international practices, we believe that MVNOs are not normally required to hold a licence nor are they entitled to "FULL LICENCE" access to interconnection or Frequencies. Umniah: Umniah objects to the entire article as MVNOs are basically resellers of the Telecom service. No reseller is required to be licensed unless the reseller sends/receives/passes telecom signals. i2: Agree. Gulf Finance House: In Bahrain although no MVNO licence is offered, TRA has advised that if mutual agreement is signed between any MNO and investors, the company can start offering the same (resell MNO traffic with the company own brand). However, once licence is offered, the fee has to be paid for licence in order to be obtained. I believe the same should be followed by Jordan TRA, in case no licence is offered.

TRC response: Despite that the MVNO is only a reseller of Public Mobile Wireless Services, all types of MVNO that could be implemented involves totally or partially sending/receiving/passing of traffic. Therefore, it is a provider of Public Telecommunication Service (as defined within Article 2 of the Telecommunications Law) and thus requires a licence from the TRC in accordance with the current licensing regime.

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Article 3.2.2: The type of Licence required for the provision of MVNO Services shall be the Individual Licence. This is due to using of Scarce Resources as detailed in Article (3.6) hereunder. Umniah: As for the type of licence being an individual one, Umniah sees that the use of numbers does not justify requiring a licence as those can be used from MNO's ranges. An individual licensee has more to give to the market than just numbers. Such a licensee must deliver a set of services under certain terms and conditions, which might not even be available at MVNOs. i2: Agree. FRiENDi Mobile: FRiENDi mobile notes that Article 3.2.2 (Licensing) of the Draft Decision mandates an individual licence regime for MVNOs due to the use of scarce resources. Namely, subscriber numbers and Network Codes. At the same time, we also note that pursuant to Scarce Resource Instructions and the Licence Application Instructions the TRC has sole and complete discretion to exempt any scarce resource from the requirement for an individual licence. Finally, we have also had regard to Article 3.1.2 of the Draft Decision which expressly enables MNOs and MVNOs to negotiate any model that best meets the parties needs. Considering all these provisions together FRiENDi mobile queries whether, notwithstanding that allocation of numbers and network codes may be involved, whether an individual licence is the most appropriate form of MVNO licence in all circumstances. Given our understanding that the TRC would wish to MVNOs time to market (ie provisioning time) minimized then it seems the option at least exists for the TRC to grant an exemption to MVNOs from individual licensing in favour of the faster and less onerous Class Licensing procedure and criteria. If the TRC in its final Decision retains individual licensing as the appropriate model in all circumstances then we note that Chapter IV of the Telecommunications Law (Licensing of Telecommunication Networks) grants the TRC discretion to exempt from filing various documents required to be enclosed with the licence application. In order to improve the timeliness of provisioning of MVNO services in Jordan, FRiENDi mobile submits that it would be entirely appropriate for the TRC consider reducing the documentation requirements for MVNO applications to something more akin to those required for class licensees. FRiENDi mobile would be pleased to discuss with the TRC specific suggestion in this regard as well as other general matters which may accelerate the licensing process and reduce the overall market entry timescale for MVNOs. Viacloud: Viacloud believes that should the TRC decide that the MVNO is to be licensed under the Individual licence scheme, then we see it is appropriate to have all the services provided by the MNOs to the MVNOs to should be regulated by the TRC.

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Viacloud believes that if an individual licence is to be awarded to an investor for the sole purpose of establishing MVNO, then the TRC should facilitate all the necessary regulations to help the licensee to start this service as soon as possible.

TRC response: In line with the current licensing and regulatory regime, the use of numbers requires an Individual Licence. Moreover, in accordance with the current National Numbering Plan and Regulations for Allocation and Reservation of Number Capacity, numbers can only be allocated by TRC directly to the Licensee providing Public Telecom Service; therefore, no sub-allocation of numbers is allowed. The TRC has the discretion to exempt any scarce resource from the requirement for an Individual Licence provided that such use is: (1) minor in extent and that such use would not materially deplete or otherwise materially limit the use of the general stock of the Relevant Scarce Resources, (2) would not give rise to a material distortion of competition or, (3) the refusal of an exemption would give rise to a distortion of competition. However, the Individual Licence will not put any undue restrictions on the type of the MVNO model that a Licensee is intending to implement and shall (by directly allocated numbers to the MVNO) enable the MVNO to differentiate its services from those of MNOs. Needles to say, the Individual Licence shall give the chance for the potential MVNO (the Licensee) to expand its range of service offerings beyond that of MVNO Services. This shall also minimize the TRC costs and time in processing potential MVNO licence applications and in conducting a test on usage of scarce resources to determine the required type of licence. Moreover, it shall not form an administration burden on the TRC in managing sub-allocated blocks of numbers and therefore shall not tie up the TRCs resources. The main concern of some respondents is time-to-market. The TRC believes that the time needed to process an Individual Licence application completely is adequately set to all applicants and therefore does not represent any material market entry barrier. However, it expected that all potential MVNOs would start negotiations with the MNOs in parallel while their licence application is being processed so as to start their service as soon as the licence is granted and negotiations are concluded. Potential MVNOs are reminded that providing Public Telecom Services prior to having a licence granted by the TRC is prohibited in accordance with Article (20) of the Telecommunications Law.

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Article 3.3.1: Licensees who provide MVNO Services shall be eligible to interconnect and negotiate their interconnection arrangements with other Licensees in accordance with their Licence Agreements and any related Regulations. Jordan Telecom (JT): Based on our before mentioned comments JT rejects Article 3.3.1. MobileCom: Same as JT's comments. Umniah: In addition t