OPTA designates Libertel and KPN as holders of significant market power

OPTA has still managed to designate Libertel as a provider that wields significant market power in the mobile phone market. This designation had been suspended by the District Court of Rotterdam in the first instance. The designation of KPN Mobile as a provider with significant market power in the mobile phone market will remain in effect. The purpose of these measures is to promote competition in the mobile phone market.

This designation was made in accordance with the Telecommunications Act. This legislation stipulates that a telecommunications service provider with a market share in excess of 25% is to be designated as a provider with significant market power. A study conducted by OPTA has revealed that KPN Mobile has a share of the mobile phone market of between 35% and 45%. Libertel’s share of this market is between 25% and 35%.

Designation of a party as one holding significant market power promotes competition. For instance, KPN Mobile and Libertel have a duty to honour all reasonable requests for access to their mobile networks. In addition, they are required to grant such access subject to and at non-discriminatory conditions and tariffs. This will make it easier for those telecommunications companies which do not have their own mobile phone network, such as carrier-select providers, to offer their services through mobile networks.

This measure will also promote direct interconnection between mobile operators. At present all calls between the subscribers of the various mobile phone providers are still being routed through KPN’s fixed network. A direct connection between the networks would not only be more efficient but would also cut costs, because the providers would no longer need to use KPN’s fixed network. OPTA is hoping that the mobile operators will pass on these savings to their subscribers in the form of lower charges.

In October 1999 OPTA had already designated both KPN Mobile and Libertel as providers with significant power in the mobile telephony market. Libertel filed objections to this designation and simultaneously applied to the courts to suspend OPTA’s decision. Since the court held that OPTA had failed to provide sufficient grounds for its decision, the court acceded to Libertel’s request. OPTA has now taken a new decision in relation to Libertel’s objections. KPN Mobile did not file any objections to its designation. The market research which OPTA had carried out, and which will be conducted annually in the future, showed that there were no grounds to revoke KPN Mobile’s designation.