EU Commission Opens Investigation into Czech Mobile Telephone Network Sharing

On 20 December, the European Commission opened an in-depth investigation into the Czech national regulatory authority’s (CTU) draft market analysis with regard to the regulation of the wholesale market for access to mobile services in the Czech Republic.

Access and call origination are services which mobile network operators (“MNOs”) supply to themselves and to other mobile network operators or mobile virtual network operators (operators who do not own a network, “MVNOs”) hosted on their networks.

Such services can be provided also to other MNOs who have their own network and access rights to spectrum, but their network is still underdeveloped (e.g. due to late market entry, or due to a commercial decision to rely on national roaming in certain areas, rather than deploy its own network).

CTU proposes to designate three MNOs (i.e. O2, T-Mobile and Vodafone) as having joint Significant Market Power (“SMP”) in this wholesale mobile market and consequently to impose regulatory obligations on these three operators, that are the main operators in the Czech market.

In its serious doubts letter, the Commission does not question as such that the Czech mobile market may not display the characteristics of a fully competitive market. However, the Commission questions the reasoning supporting the finding of the joint SMP, and hence the proposed regulation.

At this stage, the Commission considers that there is sufficient evidence to conclude that in the Czech market, the three main mobile operators kept their networks open and this enabled the successful commercial market entry of more than 100 MVNOs.

Although MVNOs typically do not reach a size allowing them to represent a threat to the existing MNOs, the fact that a new operator entered the market with 5G spectrum rights and is set to build its own infrastructure is very likely to have a positive impact on the market in the foreseeable future.

In addition, the view of the Commission, based on the spectrum conditions that are already in place, CTU is able to enforce efficient market entry through the existing access obligations.

 

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