Page 161 - SAMENA Trends - April-May 2021

REGULATORY & POLICY UPDATES SAMENA TRENDS

The Antimonopoly Committee of Ukraine (AMCU) first nine months of 2020
published a decision on its website permitting • in each of the involved markets there is a significant
broadband network operator Datagroup to purchase number of businesses that provide these services.
three companies belonging to the Volia group, the Consumers of services have a wide choice of
country’s largest cable TV/broadband provider, internet and television providers and are free to
Ukraine namely Kyiv Telecommunication Networks, TELESVIT choose between them
and Oisiw Ltd. Naming the seller in the transactions • almost all competitors of the merging parties
as Volia Ltd, the AMCU noted that it assessed three surveyed by the Committee reported that given
relevant markets in the merger as: provision of the high level of competition, these concentrations
services for access to TV packages to legal entities will not change the existing market balance within
and individuals; provision of internet access services the affected territorial boundaries; the markets are
to legal entities and individuals; and provision of saturated and dynamically developing.
server hosting services. The AMCU concluded that On 22 December 2020 Datagroup, backed by Horizon
the transactions did not lead to monopolization or Capital, reached an agreement to acquire 100% of
significant restriction of competition, after its merger Volia, subject to antimonopoly approval. Datagroup is
investigation established that: largely focused on the B2B segment, which accounts
• the largest aggregate share of concentration for less than 5% of Volia’s revenues. The European
participants is in the regional market of access to Bank for Reconstruction & Development has provided
TV packages for individuals within the Kiev region, Datagroup a USD65 million loan to help finance its
and it does not exceed 29% in 2018, 2019 and the Volia purchase. (April 23, 2021) commsupdate.com

The UK’s Competition and Markets Authority (CMA) has OFCOM has set out the terms of reference for their
given its final approval for the proposed merger of O2 UK future UK mobile strategy review, which will examine
and Virgin Media, having last month granted provisional how the regulator can adjust their approach in order to
clearance for the deal. In a press release confirming improve 4G and 5G based mobile (mobile broadband)
United its decision, the CMA noted that – having referred network connectivity for consumers and businesses
over the next 5 to 10 years. At present 82% of the adult
the proposed tie-up to a group of independent CMA
Kingdom Panel members for an in-depth Phase 2 investigation population has a smartphone and average mobile
– it has now concluded the deal is unlikely to lead to data use grew by 146% between 2016 and 2019, while
any substantial lessening of competition for several prices fell by almost 20%. Outdoor 4G data (mobile
reasons, specifically: the costs of leased lines are only broadband) services from all MNOs are now available
a relatively small element of rival mobile companies’ to 97.5% of UK premises and almost all UK premises
overall costs, making it unlikely that Virgin would be have coverage from at least one operator. Overall,
able to raise leased-line costs in a way that would nine in ten (90%) mobile customers are said to be
lead to higher charges for consumers; there are other satisfied with their mobile provider. OFCOM’s work in
players in the market offering the same leased-line this area tends to focus on boosting network coverage,
services, meaning the merged company will still need encouraging investment and ensuring the fair
to maintain the competitiveness of its service or risk treatment of consumers by operators. Some examples
losing wholesale custom; and that, as with leased-line of this come via the recent 5G spectrum auction (here),
services, there are several other companies providing which also had a role to play in development of the new
mobile networks for telecoms firms to use, meaning £1bn Shared Rural Network project that aims to push
O2 would need to keep its service competitive with geographic 4G coverage to 95% by the end of 2025. The
its wholesale rivals in order to maintain this business. regulator has also aided consumers by banning locked
Commenting on the final ruling, Martin Coleman, CMA mobile phones and fostering the new “Text-to-Switch”
Panel Inquiry Chair, said: ‘O2 and Virgin are important (Auto-Switching) system for UK mobile operators,
suppliers of services to other companies who serve which makes it much easier to change operator. But
millions of consumers. It was important to make sure they’re now planning to take a much longer view of the
that this merger would not leave these people worse market, which may also need to consider how existing
off. That’s why we conducted an in-depth investigation services (e.g. 2G and 3G) can be safely retired and
… After looking closely at the deal, we are reassured the impact of a rise in smaller local networks. Much
that competition amongst mobile communications like the regulator’s recent Wholesale Fixed Telecoms
providers will remain strong and it is therefore unlikely Market Review 2021-26 (FTMR) for fixed broadband
that the merger would lead to higher prices or lower and business connections, the new mobile sector
quality services. (May 20, 2021) commsupdate.com review will attempt to build a more holistic view of how

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