EC launches formal investigation into Czech mobile sharing deal

26 Oct 2016

European Commission (EC) antitrust regulators have opened a formal investigation into mobile telephone network sharing in the Czech Republic. EU Commissioner in charge of competition policy, Margrethe Vestager, said: ‘Network sharing agreements can bring about efficiencies, such as reduced deployment costs and may allow for network expansion to previously unserved areas. But, in some circumstances, network sharing may also reduce competition on the market. The network sharing agreement between the two major operators in the Czech Republic covers most of the country. We need to ensure that it will not reduce infrastructure competition and innovation.’

The EC enquiry centres on two major players in the Czech market, O2 CZ and T-Mobile CZ, which between them serve approximately three quarters of the Czech retail mobile telecommunications market. The EC statement notes that O2 CZ’s mobile infrastructure and wholesale business has been transferred to Ceska telekomunikacni infrastruktura (CETIN), a new network infrastructure company belonging to the same corporate group. In 2011 O2 CZ/CETIN and T-Mobile CZ entered into a network sharing agreement that has been increasing in scope ever since. Today, the cooperation encompasses 2G, 3G and 4G technologies across the whole country, with the exception of Prague and Brno – thus serving all other urban, suburban and rural areas, blanketing some 85% of the population.

Specifically, the Commission is interested in investigating whether or not the network sharing agreement between the parties ‘risks slowing down quality improvements in existing infrastructure, and delaying or hindering the deployment of new technologies, such as 4G LTE and future technologies, and new services based on them, in particular in densely populated areas. If this were the case, the cooperation would be contrary to EU Treaty rules that prohibit anticompetitive business practices (Article 101 of the Treaty on the Functioning of the EU) to the extent that it concerns behaviours that restrict competition. The Commission will also investigate the impact of potential efficiencies that could be brought about by the network sharing.’