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CTU proposes new temporary regulations after EC setback

8 Mar 2022

In the wake of recent comments made by the European Commission (EC) and the Body of European Regulators for Electronic Communications (BEREC), the Czech Telecommunication Office (Cesky telekomunikacni urad, CTU) has taken a further look at Market No. 3 – the wholesale market for access to mobile services and, based upon this, has opted to open a public consultation on a new draft analysis including a set of temporary measures.

As previously reported by CommsUpdate, at the end of last month the EC issued a decision requiring the CTU to withdraw its 2021 draft decision relating to wholesale mobile access obligations. Whilst the regulator maintains that MVNOs are not able to offer competitive services due to allegedly unfavourable wholesale access conditions, and proposed to designate O2, T-Mobile and Vodafone as holding significant market power (SMP), and to oblige them to provide national roaming to all, the EC had serious doubts as to the compatibility of the draft measure with EU law and opened an in-depth investigation. Subsequently, on 24 January 2022 BEREC issued its own opinion on the EC’s serious doubts, partially supporting the Commission’s initial findings.

The CTU, however, notes that remedies under national or EU competition law are not sufficient to address what it considers the main issue. ‘The Czech Telecommunication Office is a regulatory authority, so I am convinced that prices, which are one of the highest in Europe, must try to influence regulation. The law gives us that opportunity. The Council did not consider it justifiable to ignore it. We hope that the specific proposed regulatory packages will contribute to lower prices on the retail market,’ said Hana Tovarkova, chair of the CTO Council.

As such, under its temporary measures the CTU still intends to designate the three MNOs as having SMP in this market and, furthermore: ‘Proposes to impose two operators’ obligations to offer two mobile service regulatory packages in all its existing mobile network access agreements (2G, 3G, 4G and 5G). The regulation of package prices will take the form of a ban on margin squeezes in combination with the setting of a maximum wholesale price for regulated packages. All three mobile network operators will be obliged to allow access on both packages to non-discriminatory conditions, even in the case of newly concluded contractual relations with the MVNO. The regulation will be limited in time to 18 months from the effective date of the corrective measures.’

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