Vodafone Iceland, Nova in a network sharing agreement

28 Nov 2013

Icelandic mobile operator Vodafone Iceland (Fjarskipti hf.) and fellow cellco Nova have entered into negotiations to operate a shared mobile network under a newly established common infrastructure company. Under the terms set out by the deal, the two companies will provide an equal initial contribution to the 50/50 joint venture. According to a press release, the merger of the networks will create ‘great opportunities for expansion and significant advantages in investments and operations’. Further, in line with similar deals in Denmark, Sweden and the UK, the partnership will only cover a certain part of the network infrastructure, and will not have an impact on competition in the wireless market. The deal is subject to approval by the Icelandic Competition Authority and telecoms watchdog the Post and Telecommunication Agency (PTA); if endorsed, the infrastructure sharing venture is expected to commence in 1H 2014. Vodafone Iceland also estimates that the deal will result in a 25% drop in its investment costs.

In separate news, the PTA has launched a consultation on a draft analysis of leased line markets (‘market 6’ and ‘market 7’). According to a press release, the wholesale market for trunk segments of leased lines (‘market 14’) will be analysed in the coming months and will be up for public consultation in early 2014. The PTA pointed out that the markets were last analysed in September 2007 (with PTA Decision 20/2007), with Siminn and Mila designated as having significant market power in the wholesale leased line market, while Siminn was the only company found to hold significant market power in market 6 and market 7. Subsequently, the watchdog imposed certain obligations on the operators. The new analysis, however, has revealed that Siminn no longer has significant power in market 6 (market for wholesale terminating segments of leased lines), although the regulator will continue to impose obligations on Mila. Further, PTA revealed that significant barriers are no longer evident in market 7 (retail market for the minimum set of leased lines) and it will lift all obligations in said market. All interested parties are invited to submit their comments by 6 January 2013.