(Updated) The Competition Authority has just released its positive opinion regarding the Public Acquisition Operation launched ten months ago by Sonaecom to Portugal Telecom, a position already widely anticipated. «In view of the commitments made by the notifier [Sonaecom], ADC concluded that the projected position does not result in the creation or strengthening of the dominant position, which could result in significant barriers to effective competition «, can be read in the statement already distributed to journalists.
The regulator’s yes advances with a set of conditions, most of which are already known.
Among the remedies listed by the AdC, aimed at the fixed network, there is the need to present a model of horizontal separation of the fixed networks; present a model of separation from the basic network; implement horizontal separation of networks, dispose of the fixed copper or cable network business [Ă escolha da Sonaecom].
If the separation option is for the cable network, the AdC notes that a functional separation from the basic network must be implemented, while admitting that if one of the networks is not sold, a third party, approved by the AdC, must be mandated to carry out the sale operation.
Two other points listed say that Sonaecom should return the frequencies for fixed wireless access (FWA) held by the operator or PT and also extend the obligations to provide access to third parties to all conduct of companies controlled by Sonaecom [o que já acontece hoje nos termos da ORAC – Oferta de Referência de Acesso a Condutas – imposta à PT].
With regard to the mobile network, the obligations to facilitate the entry into the market of MVNOs – virtual mobile operators are mentioned, a set of obligations regarding mobile retail prices (which Abel Mateus explains is not about regulation but about measures to which Sonaecom obliges).
Regarding this issue, the AdC explains that Sonaecom is committed to ensuring an annual rate of change in the prices of services provided by TMN and Optimus that does not exceed the average price of a set of European mobile operators or, alternatively, the evolution of the INE consumer price index.
In terms of content, Sonaecom is obliged to sell shares in the distribution and cinematographic exhibition business, wholesale marketing of videograms, production and marketing of subscription television channels and television rights to premium content and the exploitation of content transmission rights for telephony mobile and Internet.
The fulfillment of the commitments assumed by Sonaecom to carry out the operation will be monitored by AdC together with representatives.
«This set of commitments allows to effectively eliminate the constraints and obstacles that prevented effective competition in the market», writes the Autoridade da Concorrência in the same statement, adding that «if this operation is successful, it will still be a contribution to the development of the Information Society «.
Abel Mateus stressed in a press conference that the market test carried out by the Competition Authority showed the interest of several operators in the assets that will be sold by Sonaecom, should the takeover bid be successful. «There are about a dozen operators that will be able to use the networks already installed to offer services», he stressed.
The President of the AdC also said that the aligned measures allow the creation of three large groups dedicated to three different networks: mobile, cable and copper.
At the fixed rate, the official expects that the conditions created will contribute to increase the local loop unbundling rate currently at 2 percent, significantly less than in other EU countries.
Studies commissioned by the AdC show that the operation will allow a price reduction of around 14 percent in all communications based on the fixed network.
There are no projections for the mobile network, but Abel Mateus guarantees that the references analyzed also indicate a price reduction.
Eight entities contributed to the final decision of the AdC and were constituted as counter-stakeholders.
The operators were consulted four times, as many as the sector regulator who was asked to give 4 opinions.
25 international studies were also consulted.
Regarding the deadlines that Sonaecom will have to proceed with the sale of assets, Abel Mateus did not provide any details although he guarantees that they are fixed in the confidential version of the decision.
The official explains that it must be a sufficient period for the group to get to know PT and explains that the non-disclosure of this information results from its commercial implications.
It should be noted that any challenge to the competition decision – as Vodafone has already threatened – will not have suspensive effects in relation to the decision.
The decision, with more than a thousand pages will be available (in the non-confidential version) within days on the AdC website.
Editorial Note: The news was updated with information from the press conference.
Related News:
2006-12-11 – PT asks CMVM not to accept OPA registration
2006-12-05 – Sonaecom takeover bid on PT receives new positive opinion from AdC
2006-09-28 – AdC gives green light to Sonae’s takeover bid on PT with aggressive remedies
2006-11-30 – Sonaecom gives in to Anacom’s objections in the OPA process
2006-10-24 – Anacom’s opinion is against Sonae’s takeover bid to PT
2006-05-25 – Sonaecom secures 1% of the capital of Portugal Telecom2006-03-07 – PTWant to distribute 3 billion euros to shareholders and admit autonomize fixed wholesale business2006-02-06 – Sonae SGPS launches takeover bid on Portugal Telecom
