Posted by on Aug 2, 2019 |

Brussels, 2 August 2019 – MVNO Europe welcomes the ČTÚ’s draft of 5G spectrum auction terms through which it is seeking to bolster competition in the Czech Republic by enabling a fourth mobile network operator and imposing (MVNO) wholesale access obligations in the 700 MHz licenses.

MVNO Europe urges the ČTÚ to maintain and extend wholesale access (MVNO) obligations in the spectrum licenses in the final text of the tender, as this will enable competition on a market where shares secured by independent MVNOs (i.e. MVNOs whose shareholding is not (in full or in part) controlled by the three main Mobile Network Operators) remain limited. More particularly, MVNO Europe welcomes Annexes 2A and 2B of the draft as these address elements such as equivalent network quality, scope and coverage for MVNOs and the recognition of the concepts of Full-MVNO and MVNE (Enabler) –  which (among others) are crucial for effective wholesale (MVNO) access.

Room for improvement

While it generally applauds the draft terms circulated by the ČTÚ, MVNO Europe has identified several elements that raise concerns and that would necessitate some improvements in the final version of the tender document. Three of them are listed below:

  • Rather than being framed in terms of enabling the provision of ‘high-speed Internet access’, the wholesale access obligation should be more generic (or at least refer to ‘mobile data’) in order to enable MVNO/MVNEs to use the wholesale access for other purposes (e.g. Internet of Things (IoT) and specialised services for industries (e.g. factories, connected vehicles), devices (laptops, tablets, AR glasses), education (e.g. campuses), and the public sector (e-health) .
  • The requirement to publish a reference offer for Full MVNO/MVNE access is welcome, but its provisions, and contract negotiation provisions, seem to allow in practice a time lag (possibly of many months) between the spectrum holder launching its own services, and enabling an MVNO to effectively launch its own retail or wholesale services. Time lag/technology lag has been a factor holding back MVNOs in the Czech Republic and elsewhere in the past and has seriously damaged competition (and thereby end-users’ interests). The ČTÚ should make sure that time lags are avoided by enabling simultaneous launch of services by the Host network operator and MVNOs/MVNEs.
  • The ČTÚ should extend wholesale access obligations to 3400-3600 MHz spectrum or at least include an opportunity for bidders to make a voluntary commitment to renew and extend wholesale access across all their spectrum holdings. A reward (e.g. in terms of lower spectrum fees) could be given to operators making such commitments.

Relationship with three-criteria test and Significant Market Power regulation

In parallel with the Czech spectrum tender terms, MVNO Europe encourages the ČTÚ to continue its efforts[1] to ensure (by means of regulatory intervention where justified) a competitive Czech electronic communications market that serves end-users (both Business-to-Consumer and Business-to-Business – including public sector) interests. MVNO Europe generally agrees with the ČTÚ’s findings[2] on the three-criteria test for the wholesale mobile access market, and agrees with the ČTÚ that the European Commission’s assessment of the ČTÚ’s findings is unsound. In particular, there is a need to recognise the objective reality, which is that alternative brands in the Czech Republic are mostly controlled by the Mobile Network Operators (in particular by O2) and that truly independent MVNOs have only achieved a very small market share to-date. Therefore, further regulatory intervention is needed to make the market genuinely competitive. If the ČTÚ is to ameliorate the current condition of the Czech electronic communications market (which is characterised by among the highest prices and the lowest mobile data allowances in the EU), it should consider efficient measures which – among other things – will  enable Full MVNOs/MVNEs to become genuine competitors.

[1] https://www.ctu.cz/tiskova-zprava-zprava-ze-zasedani-rady-ceskeho-telekomunikacniho-uradu-ve-30-tydnu-2019

[2] https://www.ctu.cz/sdeleni-o-zahajeni-konzultace-k-predbezne-analyze-velkoobchodniho-trhu-mobilnich-sluzeb