Poland’s Office of Competition and Consumer Protection (UOKiK) has completed the preliminary proceedings it began on 11 April 2014, within the framework of which it analysed cooperation among telecommunications providers making available, combining and sharing spectrum, infrastructure and telecommunications networks

Over the course of its proceedings UOKiK established the structure of the market as well as existing frameworks of cooperation between the operators with regard to sharing resources and the potential benefits and risks to competition resulting from such cooperation.

UOKiK will make its findings available to the European Commission (EC), which is currently analysing a complaint concerning cooperation between Polish operators (including spectrum sharing). The EC is the main watchdog ensuring that enterprises follow the rules of competition law enshrined in the Treaty on the Functioning of the European Union.

The current growth of the telecommunications market and the growing needs and demands of users have incentivized sharing of infrastructure between providers.

The operators cooperate in a number of areas. The simplest form of infrastructural cooperation is the sharing of elements of passive infrastructure, including facilities such as ducts and site locations. More advanced cooperation includes sharing elements of the radio access network (RAN) and also the operators’ spectrum resources.

The main benefits arising from the cooperation include savings from avoiding the duplication of the costs of using the infrastructure, which may result in lower prices for final receivers, and quality benefits associated with the possibility of providing new services or services of higher quality based on shared infrastructure.

The most pressing risks that attend the sharing of infrastructure include:

1. limited infrastructural (technical) competition, including reduced incentives to develop infrastructure and the tendency to compete strictly within the framework of shared technology;
2. significant asymmetry of assets between those enterprises which share the assets and those which do not;
3. facilitated exchange of information between competitors, enabling the coordination of behaviour on the retail market.

In the light of the potential risks that the sharing of infrastructure may create in the context of competition protection laws, especially where the sharing of active infrastructure or spectrum is concerned, UOKiK will actively monitor this form of cooperation and analyse its impact on the market. Each time companies work together the cooperation will be assessed from the perspective of potential threats to competition, and will follow an analysis of the market, including its structure and market players, operators’ position on the market, the state of competition, the level of cooperation and the power gained by the companies.

As follows from the above, network sharing agreements may have both positive and negative effects on competition. In UOKiK’s view, the more advanced cooperation among the operators becomes (embracing further elements and levels of infrastructure), the greater the risk that such cooperation may pose threats to competition, in particular by fostering coordination of the cooperating competitors’ actions. Sharing of the passive infrastructure (facilities including ducts / conduits, site locations, etc.) usually does not limit competition and could even have positive effects, such as reducing the costs of investing in the networks. Procompetitive aspects of cooperation include the significant improvement of access to services for consumers, especially in sparsely populated areas, and the opportunity to provide services in the areas where none had been available („dead zones”). On the other hand, despite the fact that active network sharing and spectrum sharing may significantly improve efficiency, it may also be a source of problems for competition, particularly in urban areas. The inability to appropriately diversify the services and retail offer of cooperating enterprises, resulting from the far-reaching range of business integration and standardisation of technology, is a potentially anticompetitive aspect of cooperation.

Additional information for the media:

Press Office, UOKiK
Pl. Powstańców Warszawy 1, 00-950 Warsaw
Phone.: +48 22 827 28 92, +48 22 55 60 314, +48 22 55 60 430
E-mail: [SCODE]Yml1cm9wcmFzb3dlQHVva2lrLmdvdi5wbA==[ECODE]

Twitter: @UOKiKgovPL