Watchdog clears way for Telenor to enter fixed broadband market

26 Apr 2021

Serbia’s Commission for the Protection of Competition (Komisiji za zastitu konkurencije, KZK) has approved an infrastructure sharing agreement between Telekom Srbija (MTS) and Telenor Serbia, paving the way for the latter to enter the fixed broadband market. The agreement is understood to allow MTS to lease access to its fibre-optic infrastructure to Telenor and to provide the latter with wholesale Ethernet bitstream services. Telenor is also understood to have gained permission to distribute TV media content owned by MTS. The deal was fiercely opposed by United Group, the parent company of Serbia Broadband (SBB) – Serbia’s second-largest ISP by subscribers – and the Serbian government’s main competitor in the media segment. Local reports had presented the agreement between MTS and Telenor variously as a merger of the two companies or as a transfer or infrastructure assets from MTS to Telenor. United Group, citing leaked internal documents from MTS, has repeatedly claimed that the deal is intended to harm SBB by pushing it out of the broadband and media markets.

Telenor noted in a statement, however, that United Group has rejected proposals for further cooperation on media distribution: ‘Telenor has not yet received the rights and permission to distribute the content produced or owned by the United Group, such as H1, Nova S, Sport Club and others, a total of 22 channels. We are sorry that United Group made such a decision, and we remain open to further negotiations on channel distribution, convinced that they will recognise the importance of this cooperation for all – citizens of Serbia, companies operating in the same segment and society as a whole.’ Telenor is gearing up to enter the fixed broadband market by the end of the year, and plans to invest EUR300 million (USD363 million) in Serbia over the next five years.

The deal required KZK approval as Serbian competition rules prohibit the cooperation of competitors within a segment except in certain circumstances, for which exemptions may be issued. Indeed, when the operators filed for approval in January 2021, the regulator noted that similar agreements between Telenor and SBB, and Telenor and A1 Serbia (previously VIP Mobile) had been exempted. KZK has yet to release the full details of the its decision on the matter, but: ‘Due to the expressed public interest, incomplete and inaccurate information presented during the procedure, the Commission will publish complete solutions with explanations that do not contain protected data’.

Serbia, SBB, Telekom Srbija (MTS), Telenor Serbia