Wholesale Access / MVNO.

European Commission Decision dated 12 December 2012 in Case Comp/M.6497 Hutchison 3G Austria/ Orange Austria – Summary of Commitments made by Hutchison 3G Austria Holdings GmbH to the European Commission.

Hutchison 3G Austria Holdings GmbH (H3G) (legal predecessor of and since July 2013 changed into Styrol Holding 3 GmbH) made commitments to the European Commission (Commission) in order to enable the Commission to approve the acquisition of former Orange Austria by H3G under the EU Merger Regulation (Commitments). There are three components to the Commitments (i) a commitment to make wholesale MVNO access available (the MVNO Wholesale Access Commitment - Section B of the Commitments) (ii) a commitment to enter into an MVNO agreement with an MVNO approved by the Commission (the Upfront MVNO Commitment - Section C of the Commitments) and (iii) a commitment to divest 2x10 MHz in the 2.6GHz frequency band (the Spectrum Divestment Commitment - Section D of the Commitments). References to H3G include Hutchison Drei Austria GmbH (universal legal successor of former Hutchison 3G Austria GmbH) where appropriate.

The Commission approved the Upfront MVNO on 18 December 2012. Below is a summary of the remaining two Commitments. A public copy of the Commission Decision dated 12 December 2012 in Case Comp/M.6497 Hutchison 3G Austria/ Orange Austria is available at the following link: http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_6497.

Spectrum Divestment Commitment

  • H3G has committed to divest 2 x 10 MHz of contiguous spectrum in the 2.6 GHz frequency band (Divestment Spectrum) to the acquirer of the 2 x 10 MHz of spectrum in the 800 MHz frequency band that is being reserved by the Rundfunk & Telekom Regulierungs-GmbH (RTR) for a new entrant in the upcoming multiband auction spectrum auction in Austria to take place in Q3 2013 (Auction Spectrum). If the Auction Spectrum is not acquired or the acquirer does not wish to also acquire the Divestment Spectrum, H3G shall not be required to divest the Divestment Spectrum, and can continue to use it.
  • The Divestment Spectrum will carry a roll-out obligation on the acquirer to roll-out its network within a reasonable time period, to be determined by the TKK https://www.rtr.at/en/rtr/OrganeTKK, to a coverage area that is equivalent to the minimum coverage area currently required within the 2.6 GHz frequency band.
  • H3G will offer to sell the Divestment Spectrum at no minimum price but is not obliged to sell for a price below zero. The acquirer of the Divestment Spectrum, and the sale and purchase agreement, must be approved by the Commission against specified requirements including inter alia being independent of and unconnected to any MNO active in Austria. If in the future the acquirer no longer meets these requirements, H3G has the right to re-acquire the Divestment Spectrum at the same price, subject to applicable approvals under Austrian and/or EU laws.
  • The RTR has stated that it will auction a total 28 blocks of 2 x 5 MHz in three frequency bands (800/900/1800 MHz) with the Auction Spectrum being reserved for a new entrant. See the RTR website for further details on the auction, the spectrum reserved for a new entrant, the licence term, roll-out obligations and other conditions. https://www.rtr.at/
  • To assist a new market entry, H3G has committed to offer the following to the acquirer of both the Auction Spectrum and the Divestment Spectrum (i) national roaming on the H3G network for 6 years on the basis of the same charges and substantially the same terms as contained in the Reference Offer for MNVO wholesale access as described below, provided that it remains open to the acquirer to negotiate a national roaming agreement with any of the other incumbent MNOs (please see the RTR website for further information in this regard https://www.rtr.at/ (ii) preferred co-location on H3G’s existing sites on standard market terms if technically feasible and subject to the underlying terms of the relevant site leases, provided that it remains open to the acquirer to negotiate co-location with any of the other incumbent MNOs under general Austria telecommunications regulations and (iii) divestment of sites that are not required by H3G for its network. H3G has committed to make available as at 1 September 2013, at least 2000 sites for potential divestment on commercial terms.

MVNO Wholesale Access Commitment

  • H3G has committed to make available wholesale MVNO access to the H3G network to up to 30% of its capacity subject to a maximum of 16 MVNOs which are independent and unconnected to any MNO active in Austria.
  • Interested MVNOs should refer to the terms and conditions in the Reference Offer located on the H3G website for further detail. A brief summary is provided below. The process for making such requests will be detailed further in Guiding Principles to be published on the websites of each of H3G, the Monitoring Trustee and the RTR.
  • Please note that interested MVNOs must apply and enter into an MVNO agreement with H3G before MVNO Wholesale Access Commitment expires. This Commitment expires on the earlier of (i) the date by which H3G has transferred the Divestment Spectrum to the acquirer and the Auction Spectrum has been transferred to the acquirer (ii) the date on which a new entrant MNO enters the market and (iii) 10 years from 11 November 2012. H3G will continue to fulfil its obligations under all existing MVNO agreements that it has entered into prior to the expiry of the Commitment.
  • The terms and conditions of the Reference Offer include the following key terms:
    • 1. H3G offers wholesale access to the H3G network for the origination and termination of circuit switched, SMS and packed switched data (including MMS) services to MVNO customers.
    • 2. H3G offers (i) wholesale access to the H3G network for the provision of value added services to MVNO customers (ii) location data for emergency call delivery services and location data and real time CDRs for legal interception services with respect to the MVNO customers (iii) and a copy of its MNP database as at the date of the MVNO agreement.
    • 3. H3G will consider reasonable requests to provide additional services, subject to separate negotiation and agreement on the terms and conditions (including charges).
    • 4. The wholesale access services will be provided using the mobile network technologies which H3G uses to provide services to its customers, including future evolutions in mobile technologies within a reasonable period of the commercial launch of the technology by H3G.
    • 5. H3G offers differentiated pricing at attractive rates, which will facilitate MVNO business models including:
      • individual per unit base rates for Circuit Switched, SMS and Packet Switched Data;
      • for Packet Switched Data, the choice between fixed per unit pricing and tiered pricing;
      • a volume discount scheme; and
      • an additional 25% retail minus pricing option for data access SIM-only services.
    • 6. Prices are subject to retail price indexation.
    • 7. The initial term of an MVNO Agreement will be of 3 years, with a right for the MVNO to extend, in principle, until 2022.
    • 8. H3G has a non-discrimination obligation.
    • 9. The Reference Offer contains further details regarding inter alia payment and security, implementation, forecasting, access to and use of MVNO customer information, numbering, privacy and data protection, use of the H3G network, intellectual property and branding, compliance, limitations of liability and warranties, termination, governing law and jurisdiction.
    • 10. The Reference Offer is subject to the MVNO and H3G entering into an MVNO agreement on reasonable terms which shall include the commercial terms in the Reference Offer. If the parties are not able to agree upon the terms of the MVNO agreement within 5 months, it is possible to refer the matter to an independent panel of experts for dispute resolution.

Appointment of Monitoring Trustee to oversee implementation of H3G’s Commitments

On 7 February 2013 the Commission approved CompetitionRx as the Monitoring Trustee in Case Comp/M.6497 Hutchison 3G Austria/Orange Austria.

The role of the Monitoring Trustee is to monitor the compliance of H3G with the Commitments attached to the Decision and to report to the Commission thereon. For further information in relation to the role of the Monitoring Trustee and this Case, please see the CompetitionRx website: http://www.competitionrx.com/

The Monitoring Trustee may be contacted directly by:

Email: H3G-trustee@competitionrx.com

Telephone: +32 2 514 9756

Fax: +32 2 514 2183

DISCLAIMER: The text of this webpage contains unofficial summaries of the Commitments and Reference Offer. Only the text of the Commitments and Reference Offer in English language is binding: http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_6497

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