Page 112 - SAMENA Trends - March 2020

REGULATORY & POLICY UPDATES SAMENA TRENDS

Regulators Argue Against India Price Floor

Indian competition chiefs dismissed It addressed its concerns to the Telecom minimum fee for voice and data in what
operators’ call for minimum pricing on Regulatory Authority of India (TRAI), ET would be the first move by the government
voice and data services, arguing it would reported. The competition agencies called to do so in any industry. The country’s
deter tariff innovation and effectively for policy reforms to improve the health three major mobile players, Reliance Jio;
guarantee a minimum level of profit for of the mobile sector, the newspaper said. Vodafone Idea; and Bharti Airtel, have
operators, The Economic Times (ET) Operators raised prices in early December pushed TRAI to consider setting a price
reported. The Competition Commission 2019, after fierce price competition since floor, which they insist is necessary
of India (CCI) and the Policy Commission Reliance Jio entered the market in 2016 for voice and data fees to return to
said imposing a price floor would likely eroded margins and profitability. At the sustainable levels and ensure their long-
reduce competition around cost efficiency, time of the price increases, TRAI initiated term profitability.
quality and charges, as well as discourage a public consultation to explore tariff
new entrants using disruptive technology. revisions, seeking views on setting a

VHA-TPG Union Moves Ahead as ACCC Drops Appeal

Australia’s competition regulator decided be completed in mid-2020, subject to the outcome, which closes the door on what
not to appeal a court decision approving remaining regulatory and shareholder “we consider was a once in a generation
an AUD15 billion ($9.9 billion) merger approvals. In a statement, the Australian chance for increased competition in the
between Vodafone Hutchison Australia Competition and Consumer Commission highly concentrated mobile telecoms
(VHA) and TPG Telecom, clearing the way (ACCC) acknowledged it does not have market”. He noted the future state of
for the companies to take the next steps to grounds for an appeal. The body opposed competition without a merger is uncertain,
finalize the deal. VHA CEO Inaki Berroeta the proposed deal from the start, on the “but we know competition is lost when
welcomed the decision, which he said will grounds it would likely substantially reduce incumbents acquire innovative new
allow it to quickly progress on a merger competition, In mid-February, the Federal competitors”. Separately, VHA revealed
“we believe will allow us to be a stronger Court of Australia ruled the tie-up would it today (5 February) switched on its first
player which will bring more choice and not substantially lessen competition in 5G sites as part of a phased rollout across
value for Australian consumers and mobile services. ACCC chair Rod Sims said Australia’s major cities in the coming
businesses”. Berroeta said the deal should the agency remains disappointed by the months.

EC Green Lights Vodafone Italy, TIM Tower Merger

The European Commission (EC) conditionally approved the tower Vodafone and Telecom Italia said the merger will make Telecom
infrastructure merger of Vodafone Italy and Telecom Italia to Italia’s tower company Inwit the second largest in Europe, with a
accelerate the rollout of 5G in the country. Reuters reported the portfolio of 22,000 masts. As concession to address competition
merger was on the verge of approval last week. In statements, concerns, the EC said Inwit will make available to rival operators
4,000 towers in cities with populations of more than 35,000. Inwit
has the responsibility of making available towers known to rivals,
respond to tower access in a timely manner and may only refuse to
rent towers for technical reasons. The anti-trust body noted both
companies scaled down a current network sharing agreement, to
leave out densely populated areas. The merger was detailed in
July 2019, under which Vodafone will transfer its mobile masts to
Inwit, which Telecom Italia has a 60 per cent stake in, and receive
€2.14 billion for its tower assets. Both operators will hold 37.5
per cent stakes in Inwit. EC competition commissioner Margrethe
Vestager said the approval of the merger will enable “fast roll-out
of 5G technology in Italy,” which will “benefit Italian consumers
and businesses and wholesale competition.”

112 MARCH 2020