Thu. Sep 28th, 2023

On 30 January, the European Commission opened an in-depth investigation into the Czech national regulatory authority’s (CTU) draft market analysis with regard to the regulation of the wholesale market for access to mobile services in the Czech Republic.

In 2019, the Commission had already expressed its concerns and commented on CTU’s initial assessment of the so-called three criteria test as a first step to (re-)regulate the Czech wholesale mobile access market. The Commission’s comments also indicated that finding joint Significant Market Power (SMP) on this market would be rather unlikely. Under the European Electronic Communications Code (the Code) CTU was supposed to take the Commission’s comments into its utmost account.

At the end of 2021, CTU notified another review of this market again and proposed to designate all the mobile network operators (i.e. O2, T-Mobile and Vodafone) as having joint SMP in the same market. The Commission opened a phase II investigation on both: the proposed assessment of the three criteria, and the joint SMP finding. Following a further in-depth investigation, including requesting and analyzing third parties’ comments and taking utmost account of BEREC’s opinion, the Commission adopted a veto decision, requiring CTU to withdraw the measure in line with the Code.

Following the Commission’s veto decision, CTU amended the draft measure, updated the market data, and consulted the market stakeholders again. CTU however retained most of elements included in its previous draft measure and notified it on 29 December 2022. On the basis of the CTU’s data the overall market structure did however not change since the previous Commission’s assessment.

Access and call origination are services which the mobile network operators (MNOs) supply to themselves and to other MNOs or to mobile virtual network operators (MVNOs) hosted on their networks. Indeed, such services can be provided also to other MNOs who have their own network and access rights to spectrum, but a network that is still underdeveloped (e.g. due to late market entry, or due to commercial decision to rely on such national roaming in certain areas, rather than deploy its own network).

CTU proposes again to designate three MNOs (i.e. O2, T-Mobile and Vodafone) as having joint SMP in this wholesale mobile market and consequently to impose regulatory obligations on these three operators, who are the only MNOs in the Czech market.

The Commission, in its serious doubts letter, does not question that there is scope for improvement of the competitive conditions also in the Czech mobile market. However, at this stage of the proceedings the Commission considers that CTU has not provided sufficient evidence to show that a joint dominance of the three MNOs exists. In particular, CTU has not proven how the three MNOs can embark on a common commercial strategy, despite the existing asymmetries in their market positions, including the retail and wholesale market shares, the sharing of networks between the two (largest) MNOs (hence their different cost structure and investments incentives), and different regulatory conditions imposed on only one of them (O2, which is already obliged to grant access to qualifying operators on at-cost basis).

The Commission therefore has serious doubts as to the compatibility of the related draft measures with EU law and considers it necessary to initiate an in-depth investigation.

The Commission has two months to further investigate the draft measures and the evidence presented therein, in close cooperation with the Body of European regulators (BEREC). At the end of the Phase II investigation period, the Commission may either lift its reservations or issue a veto under Article 32 of the European Electronic Communications Code. During this period, CTU will not be able to adopt its draft measures.

The Commission’s serious doubts letter, opening the in-depth investigation, will be available online on CIRCABC.

The invitation to third parties to submit their observations will be published on CIRCABC.


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