European Commission rejects the proposal to regulate Czech mobile markets

European Commission rejects the proposal to regulate Czech mobile markets

The European Commission has rejected the draft decision by the Czech regulator, CTU, proposing to impose wholesale access by third parties to mobile networks in Czechia.  

In 2021, CTU undertook a regulatory review of mobile markets in Czechia which proposed to designate the three largest mobile network operators (“MNOs”), T-Mobile, Vodafone and O2, as jointly having significant market power (“SMP”). This finding of ‘joint dominance’ was then used as a basis for obliging the three MNOs to offer wholesale access to their networks to other, smaller operators (“MVNOs”) at the terms mandated by the regulator.

The Commission found however that CTU’s draft measure was not sufficiently justified and that the structure of the Czech market does not support CTU’s conclusions on joint dominance. In particular, the Commission observed that the Czech mobile market cannot be considered sufficiently symmetric and transparent to sustain tacit collusion between the three MNOs and that market developments in recent years are largely positive and inconsistent with collusive outcomes. In addition, the Commission criticised CTU for not sufficiently recognising the impact of recent regulatory obligations imposed as part of spectrum conditions, which should facilitate further positive changes in the retail mobile market in Czechia.

The Commission’s position is in line with market developments elsewhere, as wholesale mobile access is not regulated anywhere in the EU, on the basis that these markets have been considered as “not susceptible for ex-ante regulation at EU level” since 2007.

Frontier Economics advises mobile operators in Czechia and elsewhere on the issues of joint dominance and related regulatory interventions.

Read the Commission’s news article here.

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