Competition Authority investigates 3G/4G ‘cartel’ allegations

23 Sep 2009

The Swedish Competition Authority (Konkurrensverket) is looking into allegations that the country’s incumbent mobile operators have unfairly excluded new players from entering the market through ‘frequency pacts’ over wireless spectrum, reports English-language newspaper The Local. The ongoing investigation relates to a November 2008 agreement made with the Swedish Post and Telecom Agency (PTS) by TeliaSonera, Telenor, Tele2, Hi3G Access Sweden (3) and minor operator Swefour regarding how unallocated 900MHz spectrum would be utilised for applications including UMTS-900 and evolutions including HSPA and so-called ‘4G’ Long-Term Evolution (LTE). The ‘pact’ was called into question by alternative telecoms operator Ventelo, which reported the arrangement to the European Commission in the spring of 2009. The move provoked a succession of critical questions from Brussels, leading the Swedish government to order an investigation by Konkurrensverket, with a response due by mid-October.

Konkurrensverket said: ‘Market division is a particularly serious type of infraction. Within their agreement, the operators have refrained from competing over a valuable commodity. In addition, the agreement implies that the entirety of the 900MHz bandwidth will be shared amongst the five largest [operators]… We are investigating whether the cooperation was in breach of competition laws, whether it imposes limits on the competition.’ The agency believes the pact prevents competitors from other EU member states from entering Sweden for the next 15 years. If findings indicate that the agreement violates EU regulations, the spectrum distribution process will have to be redone, whilst if the mobile operators are taken to court for illegal cartel building, they could face hefty fines. The Local gives a recent example in which several companies were found to have unfairly divided up the Swedish asphalt industry, and fined a combined total of USD29 million.