EU questions Czech plan to regulate wholesale mobile network access

The European Commission has opened an in-depth investigation into the Czech telecom regulator CTU’s proposal to regulate wholesale access to mobile networks.

The Commission questioned the CTU’s claim of joint dominance by the three existing mobile network operators and compatibility of the proposed ex ante regulation.

As such, access and call origination are services which mobile network operators (“MNOs”) supply to themselves and to other mobile network operators or mobile virtual network operators hosted on their networks.

Such services can be provided also to other MNOs who have their own network and access rights to spectrum, but their network is still underdeveloped.

In addition, CTU proposes to designate three MNOs (i.e. O2, T-Mobile and Vodafone) as having joint Significant Market Power in this wholesale mobile market and consequently to impose regulatory obligations on these three operators, that are the main operators in the Czech market.

At this stage, the Commission considers that there is sufficient evidence to conclude that in the Czech market, the three main mobile operators kept their networks open and this enabled the successful commercial market entry of more than 100 MVNOs.

Although MVNOs typically do not reach a size allowing them to represent a threat to the existing MNOs, the fact that a new operator entered the market with 5G spectrum rights and is set to build its own infrastructure is very likely to have a positive impact on the market in the foreseeable future.

In addition, the view of the Commission, based on the spectrum conditions that are already in place, CTU is able to enforce efficient market entry through the existing access obligations.

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.