Regulators are concerned that MVNOs could struggle to compete once mandated access obligations fall away and that consumers will miss out
MVNOs have driven competition over the last decade: Regulators have concerns about the future competitiveness of Austria’s mobile market. They want to find out what the future holds for competition at the wholesale level, since the commitments made by H3G following its merger with Orange in 2012 will expire at the end of this year. At the time, the EC cleared the deal subject to the merged entity divesting some spectrum, and to provide access to up to 30% of its network capacity for up to 16 MVNOs for 10 years. While the Austrian market never saw the entry of a fourth MNO, regulators welcomed the entry of MVNOs into the market which partially offset some initial increases in retail prices following the merger.
Concerns in Austria have been brewing for a while: While competition appears to have intensified initially as a result of the access commitments, regulators now see a risk that it could be harmed, with possible detriment to consumer welfare. For the past two years, the RTR has received complaints from MVNOs about difficulties in obtaining access to mobile operators’ networks. These concerns echo the remarks made in January 2021 by the Austrian competition authority, which was already aware of cases of MVNOs struggling to obtain access, particularly to operator’s 5G networks. Since the RTR is aware that 5G requires considerable investment from MNOs and will create potential for new business models, it wants to explore the extent to which cooperation between MNOs in deploying 5G infrastructure will support competition and how it will affect MVNOs. The competition authority is also involved in the analysis, so that it can identify potential measures to address any market problems that emerge.
Markets in which there are fresh talks of consolidation will follow this review with interest: The concerns raised by the Austrian regulator are similar to those expressed in other countries about the risk of concentration in mobile markets. At a time when the European Commission appears more open to consolidation than in the past in order to facilitate investment, national authorities warn of anticompetitive behaviour and possible price increases. At the national level, some regulators are unconvinced about the positive impact of consolidation on investment and increased quality of service. This has become apparent in Italy and Portugal, where competition authorities have recently sanctioned operators for anticompetitive conduct and linked it to excessive concentration in their respective markets. Those looking to merge will follow with interest the Austrian review. Should authorities find the need to intervene, markets where 4-to-3 mergers have been recently proposed (i.e. Italy, Spain, Portugal, and the UK), could face a further uphill struggle.
Source: https://www.rtr.at/TKP/presse/pressemitteilungen/pressemitteilungen/pinfo22022022tkp.de.html
