European Commission objects to Czech mates’ network sharing

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The Commission warned operators O2 CZ and T-Mobile CZ, and the Czech telecom infrastructure provider CETIN, that their network-sharing agreement limits competition.

This is in breach of the European Union’s antitrust rules. Commissioner Margrethe Vestager, who oversees competition policy, said in a statement, “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 [them] 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.”

Too concentrated and cosy?

O2 CZ and T-Mobile CZ are the main operators in the Czech retail mobile market. O2 CZ's mobile infrastructure and wholesale business have been transferred to CETIN, a network infrastructure company belonging to the same corporate group.

The network sharing by O2 CZ/CETIN and T-Mobile CZ started in 2011 and the Commission alleges “has been increasing in scope”. Now it covers all mobile technologies (2G, 3G and 4G) and the entire territory of Czechia with the exception of Prague (pictured) and Brno, which equates to about 85% of the population.

The Commission is unhappy because the Czech mobile market is concentrated, with only three mobile network operators. Further, those doing the network sharing are the two largest, whose networks serve around 75% of the population.

On these grounds, pending further enquiry, the Commission holds the view that instead of leading to greater efficiencies and higher service quality, the network-sharing agreement is likely to remove the incentives for the two mobile operators to improve their networks and services to benefit customers.

Citing BEREC

The Commission says its analysis of the situation is in line with the principles applied by the Body of European Regulators for Electronic Communications (BEREC) in its common position on mobile infrastructure sharing of 13 June 2019.

The Commission opened a formal investigation in October 2016.

O2 CZ is a mobile communications subsidiary of the PPF Group, with more than six million lines, both fixed and mobile.

T-Mobile CZ is a mobile communications subsidiary of the Deutsche Telekom group, which has operated in the Czech Republic since 1996.