A week after Mobistar launched Global System for Mobile communications cellular service in Belgium, sole incumbent Belgacom Mobile cut its cellular rates between 30 percent and 34 percent.
However, Mobistar’s rates are equally competitive to Belgacom’s new rates, said Luca Tassan, analyst at London-based Economic and Management Consultants International Inc. Some believe this may encourage a price war.
Belgium is “a very promising market,” Tassan said. When considering the income levels of Belgian citizens, the country has a particularly low penetration level (less than half a percent), added Tassan.
Tassan said one more mobile operator in the marketplace would further spur growth and believes the government is considering awarding a DCS-1800 personal communications services license in 1997.
Along with the rate decrease, Belgacom’s GSM service, Proximus, introduced three new rate plans that replace its existing rate plans. ProxiFun is the new low volume calling plan and will cost subscribers an average of 30 percent less than the previous Personal plan. ProxiPro, for professional users, offers an average 33 percent reduction from the Magellan plan it replaces, and ProxiPlus, for the highest use customers, offers an average of 34 percent savings on tariffs charged by the existing plan Marco.
Current customers automatically will receive the tariff discount that corresponds with their existing calling plan, said Belgacom. Proximus subscribers also can change rate plans at no charge before Nov. 1, said the company.
Proximus has 56 roaming agreements, and subscribers can place and receive calls in 35 countries, said Belgacom.
Mobistar won its GSM license last fall and is using equipment supplied by Alcatel NV, Motorola Inc. and Northern Telecom Ltd. The new operator said it planned to launch Sept. 3 with more than 600 base stations covering areas serving 90 percent of Belgium’s 10 million people. Mobistar intends to reach 97 percent of the population by the end of the year.
Sources report Mobistar is recruiting service providers, including Debitel, a mobile phone subsidiary of Germany-based Daimler-Benz InterServices A.G., and Intercity Mobile Communication of Britain.
Mobistar started as a 90 percent/10 percent joint venture of France Telecom Mobiles International, and Belgian data communications company Telinfo. Last month, Reuters reported France Telecom sold a percentage of its share to private and public Belgian investors, which collectively now own 28 percent in the GSM venture.
Belgacom Mobile is a joint venture of state-owned telephone operator Belgacom S.A., which owns 75 percent, and AirTouch International, which holds 25 percent. Belgacom S.A. recently divested 49.9 percent of its shares to ADSB, a joint venture of Ameritech Corp., with 35 percent; Tele Danmark, of Denmark, with 33 percent; Singapore Telecom, with 27 percent and local Belgian investors holding the remaining 5 percent.
EMCI reported Belgacom had 265,000 GSM and 42,000 analog subscribers in June-a small portion of the country’s 10 million people. AirTouch spokeswoman Susan Rosenberg said Belgacom’s GSM subscribers totaled more than 300,000 last month.
Belgacom forecasts GSM growth in Belgium will reach 21 percent penetration by 2000.
