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UMTS collaboration possible provided sufficient competition exists

UMTS licence holders are allowed to collaborate provided sufficient competition between individual parties continues to exist. Under the current licence conditions, joint construction and use of UMTS networks is allowed if each party is able to determine the quality of its own network. It is not allowed for all parties to establish one joint network. These conditions are essential to ensure that UMTS licence holders will continue to compete for the end-user’s custom.

This is the conclusion drawn by the NMa (Netherlands Competition Authority), OPTA (Independent Post and Telecommunications Authority) and the Ministry of Transport, Public Works and Water Management. Together they have issued a draft memorandum which provides comprehensive clarification of the opportunities for collaboration in the construction of UMTS (Universal Mobile Telecommunications System) networks.

For some time, UMTS licence holders have been researching opportunities for collaboration in network construction. Not only from a cost-saving point of view, but also in order to limit the number of sites required for masts and antennas as far as is possible. Several companies have asked the NMa, OPTA and V&W to clearly indicate what is and what isn’t allowed under current UMTS licence conditions and competition regulations.

The NMa, OPTA and V&W are of the opinion that collaboration in the construction and use of UMTS networks will contribute to more rapid UMTS development. However, in order to maintain competition between UMTS licence holders they have set clear parameters for this collaboration.

In accordance with licence conditions, by 1 January 2007 UMTS licence holders must have constructed their own networks, providing coverage for, inter alia, all towns and cities with more than 25,000 inhabitants. This condition was devised to safeguard competition between UMTS networks. If the collaboration were to go so far that individual networks did no longer exist, this condition would not be met. Collaboration in parts of the network installation is allowed provided the parties involved ensure they remain able to independently determine their network settings. By doing this, UMTS licence holders will continue to be competitive. They retain their own network and therefore conform to the coverage obligation that comes into force on 1 January 2007.

The memorandum states that joint use of antenna sites, masts, aerials, power supply and leased lines will generally not cause any problems. Joint use of base stations and network control is also allowed, provided each company can individually determine the network quality.

Joint use of frequencies and core networks is not allowed. A core network is the nucleus of the UMTS network. It contains databases and other necessities for delivering services like subscriber administration and interconnection.

In addition, licence holders must comply with competition regulations. An NMa exemption is required for any agreement that restricts competition. In considering exemption requests, one of the important pre-conditions used by the NMa is that sufficient competition must continue to exist between UMTS licence holders, both in the areas of UMTS services and UMTS networks. This means it is certainly not allowed for all parties to construct one joint UMTS network.

Interested parties are invited to present their view on the draft memorandum by Friday 17 August. A definitive memorandum will be formulated after this date.