The Office of Fair Competition on Friday confirmed that an exclusivity clause in a draft franchising agreement filed by Vodafone Malta was not dropped but altered in the version it received.

Marcel Pizzuto, head of the Office of Fair Competition (OFC), told The Sunday Times: "The clause submitted to us was changed but the clause is still there."

While he would not reveal the contents of the new clause, he said the application for negative clearance for the agreement was still "under review" and he expected to issue the result of his decision "early next week".

The franchising agreement, signed by 25 top specialist mobile phone retailers in 12 localities in Malta as "exclusive and authorised Vodafone Live! dealers", is being scrutinised by both the OFC and the Malta Communications Authority.

Mr Pizzuto said the Office of Fair Competition last week met both Vodafone Malta and Go Mobile, and visited a number of the retail outlets to see how the franchise agreement is being applied.

These meetings are being held very much on a legal level, with a meeting between the OFC and the MCA expected to take place tomorrow.

Many dealers who signed the franchise agreement with Vodafone Malta are not aware that the clause has been changed. One of the dealers, speaking to The Sunday Times on condition of anonymity, said when the dealers were first approached to enter the agreement, many did not agree.

"We want to sell the products of both operators," the dealer said. "When you go to a petrol station, you do not expect to be told: 'I sell diesel only. I cannot show you or speak to you about the benefits of petrol.'

"We could very well sell Go Live! behind Vodafone's back but that is not etiquette. They (Vodafone) could also send someone undercover to check."

The dealer even questioned Vodafone's business practices in appointing the 25 franchise-holders, alleging that 30 dealers were first approached. When some were reluctant to sign up, other nearby shops were approached, with the dealers made to believe that this minor outlets were being considered at the specialists' expense.

Vodafone Malta yesterday week told The Sunday Times: "This agreement does not preclude the outlet from selling non-Vodafone MMS phones, starter packs and top-up vouchers. Customers are therefore able to access other MMS services."

To the question: "Would customers be able to buy Go Mobile MMS services from these outlets?" Vodafone Malta replied a categorical "yes". The exclusivity element related to where Vodafone Live! was being sold from. "You cannot get Vodafone Live! from anywhere else but these retailers and Vodafone branches in Malta and Gozo," the company said.

Go Mobile are seeing the franchise agreement as "all-out war" in their regard since over 40 per cent of its dealer business comes from these 25 dealers.

If these dealers are not allowed to display any Go Mobile posters, leaflets, dealer kits or magazines, or to explain or talk about Go Mobile's MMS products and services, it will be at a disadvantage and the dealers will not be free to give impartial advice to their clients.

Peter Gauci, senior executive, Sales and Marketing of Go Mobile, stressed: "We want to ensure customers are offered a complete choice from unbiased retailers. Our agreements are non-exclusive in the spirit of open competition and we want retailers to be free to sell what clients require without fear or hindrance."

Meanwhile, the MCA said on Friday it has yet to receive an application from both Vodafone Malta and Go Mobile for clearance on tariffs for MMS services. Both operators are currently offering the service free of charge on a trial basis until December 31.