Select Committee on Foreign Affairs Appendices to the Minutes of Evidence


Memorandum from Mr John Borda

  I attach a report containing a summary solution to Gibraltar's telecoms difficulties, including comments on yesterday's Press Release by the Government of Gibraltar on the subject (attached[4]).

  In view of the fact that the Spanish Government offer is illegal, as well as underhand, and that they are unlikely to offer a solution which addresses the root cause of the problem (themselves), it now becomes urgent to implement an interim solution which bypasses them, until such time as prosecution forces them to accept the 350 IDD code.

  In this way Gibraltar's telecoms can be normalised, and removed as a source of friction. An Anglo-Gibraltarian solution would improve trust between Gibraltar and the UK which is currently at a low ebb.



  1.  Gibraltar is expecting a shortage of telephone numbers accessible from Spain, due to the Spanish Government's illegal non-recognition of Gibraltar's 350 IDD code. While Gibraltar could unilaterally expand and renumber its numbering system, those numbers would be inaccessible from Spain for this reason. I propose an interim solution that would solve this, and other problems, without the need for Spanish co-operation.


  2.  The proposed use of UK's 02350 and 07350 National codes (or others if not available) to replace the use of Spanish Cadiz exchange would:

    1.  Remove the Spanish stranglehold on Gibraltar's telecommunications.

    2.  Allow Gibraltar mobile phones to be used in Spain ("roaming"), and be called from Spain.

    3.  Allow "least cost dialling" international calls to Gibraltar to be successfully routed via the UK.

    4.  Remove the danger of Gibraltar's telecoms being compromised by Spanish interference. (See also attached Press Release[5]).

  3.  As such, there is no real disadvantage to either the UK or Gibraltar, and very great advantages. The change would be visible only in Spain, and such change is inevitable when Gibraltar renumbers, as it must do soon.


Landline Phones

  4.  Currently, while Gibraltar has its own allocated International Direct Dialling (IDD) code of 350, this is recognised by all countries except Spain. As an "interim solution" 30,000 numbers were allocated to Gibraltar from the Cadiz telephone exchange, so that they could be dialled as if they were part of the Spanish national telephone network.

  5.  While initially workable, though politically repugnant to Gibraltarians, this solution has worked until recently. Because of Gibraltar's expanding economy, Gibraltar has now exceeded the 30,000 lines allocated to it, and the Spanish government are using this as a bargaining chip in negotiations from which they expect to gain concessions.

  6.  The "100,000" lines (in reality about 70,000 usable additional lines) offered by the Spanish government do not address the root of the problem, and the condition placed that they are not used for Gibraltar's finance centre defeats the object of having those lines in the first place. This raises the additional danger that the lines could be withdrawn at any time should the Spanish government feel that some lines might benefit Gibraltar's economy, or in retaliation for some real or imaginary grievance. Also, such is the pace of expansion in Gibraltar that these lines would be exhausted quickly, tightening the strangehold once again, at the cost of permanent concessions. Please also see attached Press Release,[6] where the expert legal opinion of the Gibraltar Government is that the offer is, in fact, illegal and amounts to an attempt by the Spanish government to take over Gibraltar's complete numbering plan.

  7.  There has also been the suggestion that these lines might be bugged without due legal process in Gibraltar. The suggestion is not so far-fetched if the Spanish government's policy of economic strangulation is taken into consideration. Industrial espionage of this sort would enhance their ability to damage Gibraltar's economy. However, there is no evidence of this happening at this time.

Mobile Phones

  8.  Gibraltar's mobile phones are not accessible via Spain directly, due the non-recognition of the 350 IDD code as detailed above. They can also not be used within Spain as Spanish telecommunications companies (telcos) are forbidden from honouring "roaming" agreements (already signed) with Gibraltar mobile phone operators. Spain is the only country to do this. This inhibits Gibraltar's ability to open up its mobile phone market to other operators, and is in breach of EU competition regulations.

Disruption to International Calls

  9.  This arises out of the liberalisation of the international phone call market. Telcos are free to route their calls through the cheapest operator, regardless of the physical route taken (Least Cost Routing). While this is generally of benefit, it has caused Gibraltar significant problems in terms of failure of calls routed via Spain, which sometimes get a "this number does not exist" automatic response.

  10.  As there are two routes available, either via Spain or direct to Gibraltar, and Spain can take advantage of economies of scale, the cheaper route is via Spain. However, international telcos have not anticipated that they need to convert a number directed at Gibraltar into a domestic Spanish number for the Spanish exchange to recognise it. This has caused a large number of calls to Gibraltar to be greeted with a "number not recognised" message, with consequent loss of business to Gibraltar.



  11.  Gibraltar would certainly benefit from a "normalised" situation. Apart from being able to develop its telecoms, and hence other businesses, in a natural manner, it would remove a source of tension between Gibraltar and Spain, which would also benefit the UK. Another advantage is the removal of the implication of being part of Spain by virtue of the telephone system. As there is no possibility of integration with Spain in the even distant future, this has positive political benefits too. Once all benefits of its restriction were removed, Spain might decide to accept the 350 code, rather than face the EU Commission in court.


  12.  The British Government gains from the removal of a source of friction in Anglo-Spanish relations. It also improves the British/Gibraltarian bargaining position with respect to normalising Gibraltar/Spain relations. A bilateral Anglo-Gibraltar solution would also improve Gibraltarian trust in the British Government, which has been sorely tested of late.


  13.  The Spanish hinterland would also greatly benefit from any increase in Gibraltar's economy. As the Gibraltar resident workforce is almost 100 per cent employed, extra workforce would have to come from the neighbouring area. Indeed, 4,000+ workers currently commute from Spain. Indirect benefits would also accrue to the area, as both these commuting workers, and those resident in Gibraltar spend their earnings in the hinterland. Again this is already the case, two hypermarkets and many other businesses rely on money earned in Gibraltar, increasing employment in what has been a depressed part of Spain. Gibraltar would then become the "financial powerhouse" of the region, providing cheaper "seed capital" for businesses in Spain.

  14.  The Spanish government would gain financially through increased tax revenues and reduced social security payments. The improved financial status of the Andalucian region would also help to reduce the high crime rate in the area, by securing honest employment for more citizens.

  15.  Unfortunately, the Spanish government places the destruction of Gibraltar's economy above the welfare of its citizens, and is therefore unlikely to co-operate in a full solution. Its conditional offer of 70,000 additional lines is unacceptable, precisely because it is conditional and could form the basis of a withdrawal of those lines at any time. This insecurity is unacceptable to a modern economy. This is as well as the sound legal reasons outlined by the Gibraltar Government in the attached Press Release.[7]


  16.  As the Spanish government is unlikely to normalise its policy on Gibraltar, a means must be fond to "remove them from the loop".

  17.  The UK would allocate part of its domestic numbering system to Gibraltar. Ideally, these numbers would contain the existing "350" prefix for ease of transition. The prefixes 02350 and 07350, the latter allocated for mobile phones, would be ideal. Spain would then have six months before the use of the Cadiz exchange by Gibraltar ceased. This should be sufficient time for Gibraltarian users to inform their contacts of the change. All numbers reaching Gibraltar via the Cadiz exchange would also get a recorded message informing them of the change. Simultaneously, Gibraltar could adopt six-figure telephone numbers, rather than the current five-digit numbers available so far.

  18.  This would make two million lines available in total. This should be more than sufficient for the foreseeable future, though there would be no problem with expanding this to seven or eight digits as needed. Spanish domestic subscribers would then be able to dial Gibraltar landlines, and now, also mobile phones in a normal fashion as if they were part of the UK network. The difficulties with "roaming" would also be resolved as Spanish callers would just dial an unblocked UK number to reach the phone in a normal manner. It would probably be politically difficult for the Spanish government to order the blocking of UK numbers.

  19.  International telcos could then route calls to Gibraltar via the UK in a normal manner, without risking the loss of calls, while taking advantage of the UK's economies of scale to keep prices down.

  20.  This would provide as close to a normal solution as is possible under current circumstances. There would be no question of Gibraltar giving up it's 350 IDD code, which would still be usable by all other countries and would remove all advantages to the Spanish government of non-recognition. Court action in the EU would still proceed against the Spanish government until normalisation was complete.

  21.  The advantages, as detailed previously, to both Gibraltar, the UK and Spain are obvious and permanent, as would be the normalisation of any other area. While the Spanish government might be disgruntled at the loss of a bargaining chip, it would gain in other, more tangible ways.

  22.  I therefore submit this as a possible solution to a part of the Spanish discrimination against Gibraltar.

Mr John Borda

Brampton, Cambridgeshire

January 2002

4   Government of Gibraltar Press Release No: 14/2002, 23 January 2002. Not printed. Back

5   Ibid. Back

6   Government of Gibraltar Press Release No: 14/2002, 23 January 2002. Not printed. Back

7   Government of Gibraltar Press Release No: 14/2002, 23 January 2002. Not printed. Back

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