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Commission approves 3rd Generation mobile network sharing in Germany

July 16, 2003

The Commission today took a favourable decision on 3G mobile network sharing. This decision confirms that site sharing in itself does not raise competition concerns. The investigation has also confirmed that national roaming between licensed network operators benefits consumers by allowing the operators involved to offer better and quicker 3G coverage. This is especially true for less built-up and rural areas of Germany. Roaming by O2 Germany's customers on T-Mobile's network can also be exempted from the competition rules with respect to urban areas however for a more limited period. Roaming will enable the smallest operator on the German market - O2 Germany - to launch earlier and better 3G services. The exemption for rural area roaming will end on 31 December 2008. In urban areas, the exemption will start to be phased out earlier across specific cities and regions comprising around 50% of the German population in accordance with a strict timetable.

T-Mobile and mmO2 entered into agreements to share 3G site infrastructure ('site sharing') and to roam on their 3G networks in the UK and Germany. In February 2002, the parties asked the Commission for clearance or, alternatively, an exemption of their agreements under the antitrust rules. The Commission has already adopted a favourable decision in relation to the UK Agreement of the two parties on 30 April 2003.

The Commission's investigation has revealed that the German agreement on site sharing does not restrict competition. Site sharing between the companies does not restrict competition because the agreement is restricted to sharing basic network infrastructure such as masts, power supply, racking and cooling. It is also widely promoted for environmental and health reasons as a matter of public policy at national and EU level.

The agreement on national roaming is exempted from the competition rules. National roaming between the network providers does on the one hand limit network-based competition with respect to coverage, retail prices, quality and transmission speeds, but, on the other hand it also promotes market entry which leads to better and quicker 3G service coverage.

Roaming in urban areas is limited to O2 Germany's customers and it can be exempted during a short start-up period until it has set up its own network. Roaming will help the O2 Germany to launch better and earlier 3G services.

However, as the roll out of capacity in urban areas will be undertaken at a faster pace, the roaming exemption will be phased out in steps across specific cities and regions covering about 50% of the population in accordance with a strict timetable ending altogether on 31 December 2008.

In rural areas, the exemption will also come to an end on 31 December 2008. Roaming in rural areas will allow in particular O2 Germany, the smallest operator on the German market for mobile telephony, to compete as a nationwide 3G operator.

3G roaming in this instance will benefit consumers by increasing choice and strengthening retail competition on the German mobile telephony market.

 


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