Antitrust: Commission sends Statement of Objections to O2 CZ, CETIN and T-Mobile CZ for their network sharing agreement

Antitrust 19

European Union, 2019 Source: EC – Audiovisual Service

This article is brought to you in association with the European Commission.


The European Commission has informed Czech operators of mobile telephony O2 CZ and T-Mobile CZ, as well as the Czech telecom infrastructure provider CETIN of its preliminary view that their network sharing agreement restricts competition in breach of EU antitrust rules.

Commissioner Margrethe Vestager, in charge of competition policy, said: Operators sharing networks generally benefits consumers in terms of faster roll out, cost savings and coverage in rural areas. However, when there are signs that co-operative agreements may be harmful to consumers, it is our role to investigate these and ensure that markets indeed remain competitive. In the present case, we have concerns that the network sharing agreement between the two major operators in Czechia reduces competition in the more densely populated areas of the country.”

O2 CZ and T-Mobile CZ are major operators in the Czech retail mobile telecommunications market. O2 CZ’s mobile infrastructure and wholesale business have been transferred to CETIN, a network infrastructure company belonging to the same corporate group.

The network sharing cooperation between O2 CZ/CETIN and T-Mobile CZ started in 2011 and has been increasing in scope. Currently it covers all mobile technologies (i.e. 2G, 3G and 4G) and the entire territory of Czechia with the exception of Prague and Brno, thus amounting to around 85% of the population.

Network sharing is a widespread practice that can facilitate the roll out of electronic communications networks by reducing costs. In most cases, network sharing is a source of efficiencies. However, in some circumstances it may have a negative impact on competition.

The Commission assessed a number of specific circumstances in the present case, including the fact that:

  • the Czech mobile communications market is highly concentrated with only three mobile network operators,
  • the sharing parties O2 CZ/CETIN and T-Mobile CZ are the two largest operators, with their networks serving approximately three quarters of subscribers.

The Commission, therefore, has reached the preliminary conclusion that the network sharing agreement between the two main mobile operators in Czechia restricts competition and thereby harms innovation in breach of EU antitrust rules.

The Commission holds the view that in this instance, instead of leading to greater efficiencies and higher service quality, the network sharing agreement is likely to remove the incentives for the two mobile operators to improve their networks and services to the benefit of users.

If confirmed, this would infringe Article 101 of the Treaty on the Functioning of the European Union, which prohibits anti-competitive agreements.

The sending of a Statement of Objections does not prejudge the outcome of the investigation.

Background

The Commission opened a formal investigation in October 2016.

O2 CZ is a mobile communications subsidiary of the PPF Group, with more than six million lines, both fixed and mobile.

T-Mobile CZ is a mobile communications subsidiary of the Deutsche Telekom group, operating in the Czech Republic since 1996.

The Czech mobile communications market is highly concentrated, with three mobile network operators (O2 CZ, T-Mobile CZ and Vodafone) accounting for almost the whole market. Together, O2 CZ/ CETIN and T-Mobile CZ serve approximately three quarters of subscribers. Vodafone is smaller and, unlike the network sharing parties, has no meaningful presence in the fixed telecoms segment.

The Commission’s analysis is in line with the principles applied by the Body of European Regulators for Electronic Communications (BEREC) in its common position on mobile infrastructure sharing of 13 June 2019.The assessment concerns current and legacy technologies (2G/3G/4G) and is without any prejudice to any future assessment of network agreements involving emerging technologies such as 5G, which may have very different characteristics.

Article 101 of the Treaty on the Functioning of the European Union (TFEU) and Article 53 of the EEA Agreement prohibit agreements and concerted practices that may affect trade and prevent or restrict competition.  The implementation of this provision is defined in the Antitrust Regulation (Council Regulation No 1/2003), which can also be applied by the national competition authorities.

Article 11(6) of the Antitrust Regulation provides that the opening of proceedings by the Commission relieves the competition authorities of the Member States of their competence to apply EU competition rules to the practices concerned. Article 16(1) further provides that national courts must avoid adopting decisions that would conflict with a decision contemplated by the Commission in proceedings it has initiated.

There is no legal deadline for bringing an antitrust investigation to an end. The duration of an antitrust investigation depends on a number of factors, including the complexity of the case, the extent to which the companies concerned cooperate with the Commission and the exercise of the rights of defence.

More information is available on the Commission’s competition website, in the public case register under the case number 40305.

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

What talent means in the post-COVID-19 workplace

Energy: new ambitious targets on renewables and energy efficiency

The Americans are preparing for the next financial crisis

Inequality in the delivery of health services

At UN, France’s Macron says more ‘political courage’ is needed to face global challenges

China revisited by the former Ambassador of Hungary to China

2019: An unpredictable, confrontational and financially ominous year

Niger population’s suffering ‘increasing with each passing month’: UN Refugee Agency

Health Education, is it a necessity?

Germany is the world’s most innovative economy

Basel III rules relaxed: Banks got it all but become more prone to crisis

Maros Sefcovic Canete European Commission Energy

Better late than never? Commission runs now to fight energy dependency on Russia with the sustainable energy security package

State aid: Commission approves Danish public financing of Fehmarn Belt fixed rail-road link

Trade with the United States: Council authorises negotiations on elimination of tariffs for industrial goods and on conformity assessment

The West and Russia accomplished the dismembering and the economic destruction of Ukraine

5 libraries doing innovative things to help their communities

EU/African, Caribbean and Pacific partnership: MEPs list key aims for renewal

EU-China trade: closer ties as US-China trade battle brews

UN chief commends Algerians for ‘mature and calm’ demonstrations for change, leading up to presidential resignation

Restoring government control across Central African Republic is ‘key’ to lasting peace, stability – UN envoy

Draghi cuts the Gordian knot of the Banking Union

The US will impose tariffs on Mexico, says President Trump

Understanding and demystifying the new outbreak of Coronavirus

How COVID-19 can be the Great Reset toward global sustainability

COP21 Breaking News_07 December: “Remove Roadblocks to Climate Action”

This is where teachers are paid the most

Who will secure Lithuania?

Fair completion rules and the law of gravity don’t apply to banks

UN human rights report cites ‘multiple root causes’ of deadly Chile protests

Trump goes ahead with plan to undo globalization; targets China and EU

UN chief welcomes agreement by rival leaders in South Sudan, as a step towards ‘inclusive and implementable’ peace

German political spillovers: ECB’s Draghi resists first attacks by AfD

We need a fresh approach to climate change migration. This is why

3 strategies for Africa to thrive in this new era of globalization

‘Great cause of concern’ UN chief tells Security Council, surveying ‘bleak’ state of civilian protection

Human rights are everyone’s business, amid relentless crises around world: UN’s Bachelet

The Brussels bureaucracy blocks the Youth Guarantee scheme

Iran: UN rights chief ‘deeply disturbed’ by continuing executions of juvenile offenders

Coronavirus Global Response: EIB and Commission pledge additional €4.9 billion

The beginning of a revolution in healthcare

With Caribbean island life under threat, UN chief pushes to face ‘headwinds together’

This is where people work the longest – and shortest – hours

Service Engineer Intern – 1991

EU Border and Coast Guard: new corps of 10 000 border and coast guards by 2027

Online platforms required by law to be more transparent with EU businesses

6 ways to future-proof universities

These floating homes could protect people from flooding as sea levels rise

The European brain drain and the deteriorating medical workforce

COVID-19: MEPs fear impact on justice system and threat to rule of law

Children of ISIL terrorists likely held in ‘secret detention facilities’, UN human rights office warns

Prevention is key to ‘breaking the cycle of HIV transmission’, UN chief tells General Assembly

UN General Assembly: Here are the 5 big summits to watch for

Worldwide UN family celebrates enduring universal values of human rights

Military Medicine and its Relationship with Antibiotic Therapy

Survivors of ISIL terror in Iraq want justice, not revenge, says head of UN investigation team

Oslo leads the way in ‘Breathe Life’ campaign for cleaner cities in climate change era

‘Being open about my mental health created a better work culture’

Commission celebrates the 30th anniversary of the Jean Monnet Activities promoting European studies worldwide

EU and China resolve amicably solar panel trade dispute

How India’s new consumers can contribute to a $6 trillion opportunity

More Stings?

Advertising

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s