Czech Watchdog To Regulate Mobile Market

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The Czech Telecommunication Office is going to regulate the mobile data market next year because it has found limited competition in it. It therefore intends to impose an obligation on O2, T-Mobile and Vodafone to allow virtual operators access to their wholesale mobile services at a regulated price. This was stated by representatives of the CTU at the request of the CTK. Operators do not agree with the results of the analysis. According to them, it does not reflect the latest developments in the market.

The regulation would apply after notification by the European Commission, which should be ready by mid-next year. “The CTO found the market for wholesale access to mobile services suitable for ex ante regulation and found companies with a common significant market power. The completed analysis also includes a proposal for corrective measures. degree of effective competition, “said Tereza Meravá on behalf of the CTU press department.

The regulated wholesale price of mobile data is intended to enable virtual operators to replicate the offers of mobile network operators and compete with them on the market.

The analysis that the Office has completed in recent days has found a number of failures in the market. One of the most important is the fact that the wholesale price of data per MB transferred in the period 2015 to 2020 was always higher or at least equal to the retail price. In 2020, the average retail price of one MB of data reached the level of approximately CZK 0.05 excluding VAT and the average wholesale price reached the level of CZK 0.09 excluding VAT. The wholesale price was therefore almost double the retail price. According to the CTU, this means that virtual operators cannot profitably replicate and offer their customers virtually none of the retail tariffs including data volumes over two GB offered by network operators.

“An important milestone was the moment when T-Mobile terminated the contracts of several virtual operators. Their existence is generally not economically possible in the long run in a situation where the wholesale price of mobile data is significantly higher than retail. We have reports that the business of many of them is directly threatened in It was, of course, necessary to take action. The key will, of course, be how the European Commission will react to the proposed regulation, “added Hana Továrková, Chairwoman of the CTO Council.

According to Vodafone, the CTU does not respect the decision of the European Commission from July 2019, when it refused to regulate the mobile market in the Czech Republic. In addition, the regulator again ignores the main problem on the Czech market in the analysis, namely the sharing of mobile networks between O2 / CETIN and T-Mobile. “The uncertainty that the CTU brings to the market poses a risk to future investments. Last year and this year showed how much capacity and resilient telecommunications infrastructure is needed,” Vodafone spokesman Ondřej Luštinec told ČTK.

According to O2, the analysis turned out exactly as the chairwoman of the CTU board forwarded in the media, even before the document was drafted. “In our opinion, this in itself calls into question the expertise and objectivity of the entire analysis. The wholesale market is functional in the Czech Republic. Only eight virtual operators are successfully operating in the O2 network,” O2 spokeswoman Kateřina Mikšovská told ČTK.

According to spokeswoman Zuzana Svobodová, T-Mobile is continuously reducing wholesale prices, especially with regard to the decline in prices in the residential segment. “With the aforementioned termination of contracts to virtual operators, we first settled the administrative discrepancy, where the Czech Telecommunications Office cannot distinguish the interconnection contract from the access contract, and these contracts therefore had to be re-concluded separately. “she said.

The Ministry of Industry and Trade recently stated that the price of mobile data in the Czech Republic has halved in the last two years, a tenfold reduction since 2011. According to him, the decline is mainly due to the introduction of unlimited data tariffs and the strengthening of competition.