EC preliminary assessment highlights competition concerns in Czech market

18 Nov 2021

The European Commission (EC) has published its initial assessment in Case AT.40305 ‘Network Sharing – Czech Republic’ concluding that, after careful analysis, it has concerns over the compatibility of the horizontal network sharing agreements (NSAs) concluded between T-Mobile Czech Republic and O2 Czech Republic and Czech infrastructure provider CETIN, and the Mobile Network Services Agreement (MNSA) between O2 CR and CETIN, that they hamper competition in breach of Article 101 of the TFEU and Article 53 of the EEA Agreement. In a filing, the agency noted: ‘According to the Commission’s preliminary assessment, the NSAs, as well as the MNSA, may restrict competition in violation of Article 101(1) of the TFEU by their effects. The Commission considers that the NSAs (together with the MNSA), considered in their specific market context, reduce the Sharing Parties’ ability and incentives to unilaterally invest in network infrastructure and therefore may negatively affect the ability and incentives of T-Mobile and O2 to compete on the retail and wholesale markets for mobile telecommunications services in Czechia.’

The EC went on to say that the effect of the NSAs was to limit the rollout of 2100MHz capacity in the east of the country by T-Mobile, as well as restricting the partners’ ‘individual flexibility’ to deploy 1800MHz band services. It also led to disincentives in terms of ‘unilateral network deployments of any type due to financial disincentives as well as information exchange’, in turn potentially affecting T-Mobile and O2’s ‘ability and incentive’ to compete in both the retail and wholesale segments.

To address the EC’s competition concerns, the parties involved have reportedly offered to: modernise the mobile network; to set and review the financial conditions for unilateral network deployments; to improve the NSAs contractual provisions to limit information exchange; and to implement measures to the MNSA to prevent information leakage between the companies. Having invited comments on the proposed commitments, the Commission will now assess whether the commitments address its competition concerns.

Czech Republic, CETIN Group, O2 Czech Republic (incl. CETIN), T-Mobile Czech Republic