The German Federal Cartel Office (FCO) will monitor a future broadband development cooperation between Deutsche Telekom AG, Vodafone and Telefonica aimed at closing gaps (so called “grey spots”) in their mobile telecommunication networks. The telecommunications companies are planning a tri-party cooperation after the FCO had intervened against a first planned bilateral cooperation between Deutsche Telekom and Vodafone, citing competition concerns.
The FCO’s concerns
The initially intended cooperation between Deutsche Telekom AG und Vodafone, which included granting mutual access to their 4G mobile networks in unprofitable regions already covered by the other party, had raised competition concerns with the FCO. In particular, the German competition authority was concerned that the intended bilateral cooperation would have strengthened both companies’ market positions in relation to Telefonica without having to invest in individual network development. In the FCO’s view, Telefonica would therefore have been at a competitive disadvantage vis-à-vis its competitors, in particular, because grey spots are usually located in regions where individual broadband development is not economically viable. Against this background, the FCO insisted that Telefonica be included in Deutsche Telekom’s and Vodafone’s cooperation plan’s which now will result in a tri-party cooperation.
Monitoring of the cooperation
As a result of the cooperation, Andreas Mundt, the President of the FCO, expects significant benefits for mobile phone users in such regions where full broadband coverage has historically been lacking particularly in rural areas. According to the President of the FCO, if all network providers grant mutual access to each other’s mobile networks, gaps could be closed more effectively so that connection breakdowns can be best avoided.
However, the FCO also announced a close monitoring of the further design of the planned cooperation between the three telecommunication companies, in particular, to ensure that other market players without own wide-coverage network will not be prevented from competing. In this respect, the parties have agreed with the FCO that the cooperation will not exclude the co-use of their networks, i.e. in the form of national roaming.
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