Despite the market no longer warranting ex ante regulation, the CTU had found the largest operators collectively dominant and sought to impose remedies
EC closes in-depth investigation into the CTU’s proposals: On 24 March 2023, the EC adopted a decision requiring the CTU to withdraw its proposed draft measure to regulate wholesale access to mobile networks in the Czech Republic. Wholesale access services are typically purchased by virtual operators (i.e. MVNOs) that intend to provide mobile services to retail customers, but do not have their own infrastructure. The CTU had notified the EC of its proposals on 29 December 2022; however, a month later, the EC informed the Czech regulator that it had serious doubts as to the compatibility of the draft measure with EU law and simultaneously opened an in-depth investigation. BEREC, the Body of European Regulators for Electronic Communications, then issued its opinion on the matter, outlining its support for the EC’s findings.
The Czech market does not indicate collective SMP: In its notification, the CTU proposed to designate O2, T-Mobile and Vodafone as having joint significant market power (SMP) and to oblige them to offer a regulated wholesale mobile access to all operators. The EC found this requirement to be unjustified, noting that other tools – e.g. O2’s obligation under the 2020 5G auction rules to provide national roaming to Nordic Telecom and incrate – have the potential to bring about positive change in the retail mobile market in the Czech Republic. The EC also determined that CTU did not provide sufficient evidence that the (strict) criteria for establishing joint dominance were met, highlighting the asymmetries in the market shares and cost structures of the three main operators. Overall, the EC concluded that the Czech market did not support conclusions on collective SMP, and instead presented favourable conditions for new entrants that could create additional competitive pressure.
5G auction obligations could lead to the entry of new MVNOs: The market for wholesale mobile access has not been considered susceptible for ex ante regulation at EU level since 2007 and is not regulated in such a way anywhere in the bloc. Nevertheless, the CTU has sought to establish a finding of joint dominance in wholesale mobile since 2019, with the EC expressing concerns at the time about the regulator’s application of the ‘three criteria test’. At the end of 2021, the CTU notified another market review and proposed designation of collective SMP, which the EC soon vetoed. The latest draft market analysis also did not convince the EC that the three mobile operators have been acting in a collusive way. While the CTU has claimed its proposals would make the market more competitive and result in lower prices for consumers, it cannot adopt its draft measure as notified. The CTU will now focus on supervising the fulfilment of obligations relating to the 5G spectrum auction, which could lead to MVNOs appearing in the market.
