Czech network sharing antitrust investigation finds potential breach

czech network sharing antitrust
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The European Commission has issued a Statement of Objection to telecommunications providers in a Czech network sharing antitrust investigation.

The initial findings of the Commission’s formal investigation into potential Czech network sharing antitrust issues, first launched in 2016, were that potential breaches of EU regulations governing competition may have been committed by mobile phone operators O2 CZ and T-Mobile CZ and telecommunications infrastructure provider CETIN, which belongs to the same corporate family as O2 CZ. The mobile communications market in Czechia is concentrated among only three operators, with O2 CZ/CETIN and T-Mobile CZ collectively responsible for around 75% of mobile subscribers.

O2 CZ/CETIN and T-Mobile CZ began a network sharing agreement in 2011 with the aim of reducing rollout costs and boosting efficiency; however since that time the shared network has gradually expanded: it now covers all 2G, 3G and 4G mobile data provision and the whole of Czechia outside the cities of Prague and Brno. The Commission assessed the potential impact of the arrangement in light of both the tight concentration of mobile communications providers in Czechia and O2 and T-Mobile’s status as the two largest providers; and has reached the preliminary conclusion that the network sharing agreement is likely to restrict competition within the sector, with the potential to harm innovation by disincentivising service improvements by the two participating operators. The Czech network sharing antitrust investigation will continue; and will not be prejudiced by the Statement of Objection.

Commissioner Margrethe Vestager, in charge of competition policy, said: “Operators sharing networks generally benefits consumers in terms of faster roll out, cost savings and coverage in rural areas. However, when there are signs that co-operative agreements may be harmful to consumers, it is our role to investigate these and ensure that markets indeed remain competitive. In the present case, we have concerns that the network sharing agreement between the two major operators in Czechia reduces competition in the more densely populated areas of the country.”

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