WRITTEN QUESTION P-1196/02

by Giovanni Fava (PSE) to the Commission

(22 April 2002)

Subject: Mobile telephony market in Italy and Community competition laws Vertenza Blu S.p.A.

The crisis affecting the mobile telephony company Blu S.p.A. is not due to market considerations since its results have often exceeded the targets set in its initial business plan, giving the impression of a small but thriving company.

The measures currently being taken will jeopardise existing jobs some 400 young operators have so far lost their jobs, but 1 700 posts are threatened in the company's various branches in Italy, including 500 in the Palermo Call Center alone with the aim of proposing as the only possible solution in the current emergency to transfer its assets temporarily to TIM (at present controlled by the same majority shareholders as Blu) and thus to effect a lucrative break-up of the company (by selling Blu's more valuable assets).

These measures take no account of the fact that the company has a debt to the institutions which have contributed to making it the country's fourth operator and setting up the centro-sud production unit, including the support of national and European legislation on employment aid for disadvantaged areas (Objective 1).

The objective of eliminating a thriving competitor from the mobile telephony market on the eve of the introduction in Italy of MNP (mobile number portability) will in fact mean a reduction in competition on the market, with obvious implications in terms of the service available to customers.

The current measures contravene the rules issued by the Commission on 20 September 2001 following the bid by Benetton-Pirelli to take over Telecom Italia, which provided for the identification of a suitable purchaser for the company, capable of maintaining its position and role on the market.

In view of the break-up plan put forward by TIM, it would seem that the possible purchasers who had taken part in negotiations until July 2001 with a view to taking over the company as a whole have now disappeared. The relevant institutions and shareholders would also seem to be ignoring the need to identify other purchasers who have already expressed an interest (E-Do, Anthill).

What measures has the Commission taken, or does it intend to take, to guarantee competition and transparency mechanisms on the mobile telephony market, with due regard for the difficult employment situation which the current situation is creating?

Answer given by Mr Monti on behalf of the Commission

(31 May 2002)

On 20 September 2001, the Commission adopted a decision authorising the acquisition by Pirelli SpA. and Edizione Holding S.p.A. of Telecom Italia SpA, subject to certain commitments offered by Edizione with regard to its participation into Blu SpA.

The purpose of such commitments was to remove the serious competition concerns that would arise in the Italian market for mobile telephony given that, after the above acquisition, Edizione Holding would have controlled both TIM and BLU.

Therefore it is clear that a transaction that included (directly or indirectly) the sale to TIM of Edizione's participation into Blu, followed or not by a break-up of Blu, would be against the spirit of the decision adopted by the Commission on 20 September 2001, and would not be compatible with the commitments given by Edizione.

The foregoing condition remains in place and can only be altered upon request supported by valid reasons.