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EU charges Czech mobile operators with blocking rivals

EU charges Czech mobile operators with blocking rivals
The logo of Deutsche Telekom AG is silhouetted against the sun and clouds atop of the headquarters of German telecommunications giant in Bonn, Germany, February 19, 2019. REUTERS/Wolfgang Rattay -
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WOLFGANG RATTAY(Reuters)
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By Foo Yun Chee

BRUSSELS (Reuters) – EU antitrust regulators on Wednesday charged Deutsche Telekom’s <DTEGn.DE> mobile Czech unit, rival O2 CZ and Czech telecoms infrastructure provider Cetin with restricting competition via their network sharing deal.

The move by the European Commission could make it more difficult for telecoms operators to do similar deals to share networks, seen as key to saving costs and reducing time in the face of regulatory barriers to mergers.

The European Commission said the deal, which the country’s two biggest mobile operators and Cetin struck in 2011 and subsequently expanded, may breach the bloc’s competition rules.

The network sharing agreement now covers all mobile technologies including 4G and 85% of the Czech population.

“We have concerns that the network sharing agreement between the two major operators in Czechia reduces competition in the more densely populated areas of the country,” European Competition Commissioner Margrethe Vestager said in a statement.

The EU competition enforcer, which opened an investigation in October 2016 and can hand out fines up to 10% of a company’s global revenue, said the deal may remove the incentives for the two operators to improve their networks and services.

T-Mobile CZ, O2 CZ which is a unit of Czech investment group PPF, and Cetin can ask for a closed-door hearing to defend themselves.

(Reporting by Foo Yun Chee; editing by Francesco Guarascio and Deepa Babington)

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