Clarification on UMTS collaboration

UMTS licence holders are allowed to collaborate in the construction of UMTS network components, provided sufficient competition between individual parties continues to exist. In delivering UMTS services, the UMTS licence holders must continue to compete with each other for the benefit of the consumer.

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 (V&W). Together they have issued a memorandum which provides comprehensive clarification of the opportunities for collaboration in the construction of UMTS (Universal Mobile Telecommunications System) networks.

The UMTS licence holders have asked the NMa, OPTA and the Ministry of V&W to provide more clarification on possible collaboration regarding UMTS in respect of the Competitive Trading Act, the licensing conditions and the present Telecommunications Act. On 19 July 2001 the NMa, OPTA and the Ministry of V&W issued a draft memorandum, to which interested parties responded. After studying the responses the NMa, OPTA and the Ministry of V&W have now drawn up a definitive memorandum in order to provide the requested clarification to the market and investors.

The NMa, OPTA and V&W are of the opinion that collaboration in the construction of UMTS networks can contribute to a more rapid UMTS development. Nevertheless, in order to maintain the competition between UMTS licence holders they have set clear parameters for this collaboration. Collaboration must be limited to the joint construction and use of the UMTS radio network (such as masts, aerials and network operation). In doing so, each operator must be able to individually determine the quality of the network at its own discretion, so that in practical terms there is no difference with a network constructed entirely by a single operator. If these conditions are met, one can still regard the network as an individual and specific one.

Joint use of frequencies and core networks is not permitted. A core network is the nucleus of the UMTS network. It contains databases and other necessities for delivering services such as subscriber administration and interconnection. The joint use of such databases can facilitate harmonisation between the competitors to a substantial degree.

The memorandum also makes clear which organisation supervises which activities. For instance, the NMa assesses all collaborative ventures that restrict competition. OPTA ensures that as from 1 January 2007 each licence holder will possess its own network in, for instance, all municipalities with more than 25,000 inhabitants.

The NMa can grant an exemption for specific collaborative ventures that restrict competition. In considering exemption requests, one of the important preconditions 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. The number and the size of the parties participating in the collaboration venture, as well as the degree to which parties collaborate, is an important factor in this consideration. Moreover, the exchange of information must be limited to the necessary technical information.