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Vodafone is asking ÚOHS to investigate CETIN over alleged abuse of its dominant position in the DSL market

17. February 2016

Vodafone Czech Republic (Vodafone) has sent a letter to the Czech antimonopoly authority ÚOHS calling for an investigation of Česká telekomunikační infrastruktura (CETIN) due to an alleged abuse of its dominant position in the fixed broadband Internet market. CETIN continues to undermine competition, preventing innovation and restricting choice for customers, in the same way its predecessor O2 Czech Republic (O2) did before its split in June 2015. .

Vodafone’s complaint argues that CETIN’s new wholesale offer of DSL broadband Internet connection violates the principles of free market competition and that, as the dominant provider (and a former monopoly), CETIN continues to discriminate against alternative operators in the market.

CETIN’s hike in its wholesale DSL prices prevents new competitors from entering the market and old competitors from attracting new customers. The conditions set out in the new wholesale offer are advantageous only for companies with large customer bases, first and foremost for O2, a company sharing the same ownership as CETIN. Consumers’ freedom of choice is, therefore, still being restricted and a healthy development of high-speed, broadband Internet in the Czech Republic is obstructed.

“Vodafone has actively negotiated and continues to negotiate with CETIN about the new conditions. We have also submitted the matter to the Czech Telecommunications Office (ČTÚ), the market watchdog whose task is to support competition in the telecommunications market,” says Balesh Sharma, General Manager of Vodafone Czech Republic, adding: “Given the fact that CETIN is the dominant company in the fixed Internet connection market, the ČTÚ should impose price regulation in order to ensure equal access to the service.”

CETIN now demands a CZK 1,258 (VAT incl.) fee for the installation of a new DSL line and has also increased the price of certain other services. CETIN has been able to impose such anti-competition measures due to a lack of efficient regulation in the Czech fixed Internet access market. The company’s wholesale DSL offer makes it impossible for other operators (except its sister company O2) to generate profit from this type of service. Vodafone has no choice but to reflect the higher wholesale prices in its retail offer. As of February 15, 2016, Vodafone will charge a DSL activation fee for new customers.

Vodafone is already seeking CZK 385 million in damages from O2 (before separation of CETIN) due to O2’s abuse of its dominant position in the DSL market. However, if CETIN continues to take advantage of its prominent situation, Vodafone will be prepared to start legal proceeding.