In 2012 the European Commission cleared the acquisition of Austrian mobile phone operator Orange by Hutchison 3G (H3G/Three). Due to competition concerns, such as higher prices for end consumers or a reduction of competition and, consequently, potentially less innovation, H3G, in the capacity of mobile network operator (MNO), had to commit to providing up to 16 mobile virtual network operators (MVNOs) with access to its network for a period of ten years. This commitment will come to an end in December 2022.
Increasing number of complaints at AFCA and RTR
The Austrian Federal Competition Authority (AFCA) and the Austrian Regulatory Authority for Broadcasting and Telecommunications (RTR) are receiving an increasing number of complaints from MVNOs regarding difficulties when setting hosts and with regard to their entry into the 5G market.
The AFCA and RTR therefore decided to hold a joint press conference on 28 January 2021 to provide information about the consequences for competition of the expiry in 2022 of H3G’s commitments.
Potential risks for competition and consumers
Effective competition is an essential prerequisite for appropriate pricing and for innovative products and services in the market.
- If mobile virtual network operators are no longer given access to mobile networks, consumer prices are in danger of rising again. Pricing is a significant competition factor in the market. Additional fees such as service fees could also rise.
MVNOs might vanish from the market again
- With the three MNOs (A1, Drei and Magenta) in Austria having such strong bargaining power, there is also a risk of MVNOs exiting the market again or of them being bought up if they do not get fair access to the networks.
“The AFCA is taking these complaints very seriously, and is constantly evaluating developments in the market. MVNOs need to be given fair and appropriate access to the networks so that consumers can choose from a broad range of services with appropriate quality and attractive prices,” explains Director General Theodor Thanner.
AFCA and RTR sector inquiry of 2016
In 2015 and 2016, the AFCA and RTR investigated the impact of the takeover of Orange Austria by Hutchison 3G Austria, as well as the sale of Orange’s subsidiary “Yesss!” to A1 Telekom Austria. Both studies looked into the post-merger effects.
While AFCA’s study concentrated on the effects on existing customers, RTR’s analysis focused on prices for new customers. Both reports concluded that the merger had resulted in significant price increases by the end of 2014.
|Post-merger price increases|
|Prices (all segments)||14-20%|
|Pre-paid tariffs||20-30 %|
|Post-paid tariffs (contract tariffs)||13-17 %|
|Price increases between December 2012 and December 2014|
In 2015 several new MVNOs entered the market, which had a positive impact with prices falling and the range of offers expanding.