CELEX: 32018M8883
Language: en
Date: 2018-07-27 00:00:00
Title: Commission Decision of 27/07/2018 declaring a concentration to be compatible with the common market (Case No COMP/M.8883 - PPF Group N.V.) according to Council Regulation (EC) No 139/2004 (Only the English text is authentic)

EUROPEAN COMMISSION
                                                                Brussels, 27.7.2018
 In the published version of this decision, some
 information has been omitted pursuant to Article
                                                                C(2018) 5150 final
 17(2) of Council Regulation (EC) No 139/2004
 concerning non-disclosure of business secrets and
 other confidential information. The omissions are                      PUBLIC VERSION
 shown thus […]. Where possible the information
 omitted has been replaced by ranges of figures or a
 general description.
                                                                To the notifying party
Subject:            Case M.8883 – PPF Group / Telenor Target Companies
                     Commission decision pursuant to Article 6(1)(b) of Council
                     Regulation No 139/20041 and Article 57 of the Agreement on the
                     European Economic Area2
Dear Sir or Madam,
(1)     On 22 June 2018, the European Commission received notification of a proposed
        concentration pursuant to Article 4 of the Merger Regulation by which PPF Group
        N.V. ("PPF") intends to acquire sole control of Telenor Bulgaria EAD ("Telenor
        Bulgaria"), Telenor Magyarország Zrt. ("Telenor Hungary"), Telenor Real Estate
        Hungary Zrt., Telenor Common Operation Zrt., Telenor d.o.o. Podgorica ("Telenor
        Montenegro") and Telenor d.o.o. Beograd ("Telenor Serbia") (together the "Telenor
        Target Companies"), by way of purchase of shares (the "Transaction").3
        PPF is designated hereinafter as the "Notifying Party" and, together with the
        Telenor Target Companies, as the "Parties".
1.        THE PARTIES
(2)     PPF is a large multinational finance and investment group focusing on financial
        services, consumer finance, telecommunications, biotechnology, retail services, real
        estate, agriculture and transportation. PPF started its operations in the Czech
1    OJ L 24, 29.1.2004, p. 1 (the 'Merger Regulation') . With effect from 1 December 2009, the Treaty on
     the Functioning of the European Union ('TFEU') has introduced certain changes, such as the
     replacement of 'Community' by 'Union' and 'common market' by 'internal market'. The terminology of
     the TFEU will be used throughout this decision.
2    OJ L 1, 3.1.1994, p. 3 (the 'EEA Agreement').
3    Publication in the Official Journal of the European Union No C 230, 2.7.2018, p. 9.
Commission européenne, DG COMP MERGER REGISTRY, 1049 Bruxelles, BELGIQUE
Europese Commissie, DG COMP MERGER REGISTRY, 1049 Brussel, BELGIË
Tel: +32 229-91111. Fax: +32 229-64301. E-mail: COMP-MERGER-REGISTRY@ec.europa.eu.
 ---pagebreak---        Republic and is now mainly active in the Czech Republic, Slovakia and, in sectors
       other than telecommunications, also in Russia, Germany, the Netherlands, the
       United Kingdom, the U.S., China, India, Vietnam, Indonesia and the Philippines.
       PPF is controlled by Mr. Petr Kellner.
(3)    The Telenor Target Companies are active primarily in telecommunications, acting
       as mobile operators in Bulgaria, Hungary, Serbia and Montenegro. The core of
       their activities therefore lies in providing mobile telecommunication services to
       end customers. The scope of activities of the Telenor Target Companies is mainly
       confined to the countries of their incorporation, for which they hold the relevant
       telecommunication licenses.
2.      THE OPERATION
(4)    On 21 March 2018, a Share Sale and Purchase Agreement was concluded among
       inter alia (i) Telenor Eiendom Holding AS, (ii) Telenor Mobile Communications
       AS, (iii) Telenor A/S, and (iv) Telenor Communication II AS, as sellers, and PPF
       TMT Bidco 1 B.V., as purchaser, pursuant to which PPF will, indirectly, through
       PPF TMT Bidco 1 B.V., acquire: (i) 100% of the shares in Telenor Bulgaria, (ii)
       100% of the shares in Telenor Hungary, (iii) 100% of the shares in Telenor Real
       Estate Hungary Zrt. 4, (iv) 100% of the shares in Telenor Common Operation Zrt.,
       (v) 100% of the share capital in Telenor Montenegro and (v) 100% of the share
       capital in Telenor Serbia.
(5)    The Transaction constitutes a concentration within the meaning of Article 3(1)(b)
       of the Merger Regulation.
3.      EU DIMENSION
(6)    The undertakings concerned have a combined aggregate world-wide turnover of
       more than EUR 5 000 million5 (PPF: EUR […] million; the Telenor Target
       Companies: EUR […] million; combined: EUR […] million; in 2017). Each of
       them has an EU-wide turnover in excess of EUR 250 million (PPF: EUR […]
       million; the Telenor Target Companies: EUR […] million; in 2017), but they do
       not achieve more than two-thirds of their aggregate EU-wide turnover within one
       and the same Member State.
(7)    The notified operation therefore has an EU dimension pursuant to Article 1(2) of
       the Merger Regulation.
4.      RELEVANT MARKETS
(8)    The Transaction does not result in any horizontal overlap in the EEA in the
       telecommunications sector because the activities of the Parties are confined to the
       territories for which they hold the respective telecommunication licenses, i.e.
       Bulgaria and Hungary in the case of the Telenor Target Companies, and the Czech
4   The activities of Telenor Real Estate Hungary Zrt. are limited to a particular real estate property where
    the headquarters of Telenor Hungary are located [details of company’s activities].
5   Turnover calculated in accordance with Article 5 of the Merger Regulation.
                                                        2
 ---pagebreak---        Republic and Slovakia in the case of PPF (through its subsidiaries O2 CR and O2
       SK).
(9)    PPF and the Telenor Target Companies are present upstream in (i) wholesale
       international roaming services; (ii) wholesale mobile call termination services and
       (iii) wholesale fixed call termination services in the EEA countries in which the
       Parties are present (i.e. PPF in the Czech Republic and Slovakia, the Telenor
       Target Companies in Bulgaria and Hungary). Those services are vertically linked
       to (i) the retail supply of mobile telecommunications services and (iii) the retail
       supply of fixed telephony services to end customers.
4.1.     Retail mobile telecommunications services
(10) Mobile telecommunications services to end customers include services for national
       and international voice calls6, SMS (including MMS and other messages), mobile
       internet data services and retail international roaming services.
         4.1.1.    Product market definition
(11) The Notifying Party submits that in the present case, the relevant product market
       should be defined, in line with the Commission’s previous decisional practice, as
       the overall retail market for mobile telecommunications services without further
       segmentation.
(12) The Commission considers that, in line with its previous practice, 7 the product
       market for retail mobile telecommunications services includes mobile services
       such as voice, SMS/MMS, data and international roaming services, considering
       that all providers offer all these types of services to their customers.
(13) The Commission has also considered whether the product market can be further
       segmented between residential and business customers and whether "over-the-top"
       ("OTT") services should be considered as part of the market. In any case, for the
       purpose of the present decision, the exact product market definition in relation to
       the provision of retail mobile telecommunications services can be left open as the
       Transaction does not give rise to serious doubts as to its compatibility with the
       internal market under any possible market definition.
         4.1.2.    Geographic market definition
(14) The Notifying Party considers that the market should be considered national in
       scope in line with previous Commission decisions.
6   The term international voice calls is used for calls that are made by a domestic user when in its home
    country, but that terminate at destinations which are abroad such as if the receiving number is a foreign
    one.
7   For example Commission decision of 12 December 2012 in case M.6497 – Hutchison 3G
    Austria/Orange Austria; Commission decision of 11 May 2016 in case M.7612 - Hutchison 3G UK /
    Telefónica, Commission decision of 3 August 2016 in case M.7978 – Vodafone/Liberty Global/Dutch
    JV.
                                                         3
 ---pagebreak--- (15) The Commission has consistently found that the markets for retail mobile services
       provided to end consumers are national in scope.8
(16) The Commission considers the market for retail mobile services to be national in
       scope, taking into account the fact that licences to mobile operators are granted on
       a national basis.
4.2.    Retail fixed telephony services
(17) On the market for retail supply of fixed telephony services, operators provide fixed
       voice services to end customers. In line with previous Commission decisions, fixed
       voice services include the provision of connection services or access at a fixed
       location or address to the public telephone network for the purpose of making and
       receiving calls and related services.9
         4.2.1.     Product market definition
(18) The Notifying Party submits that in the present case, the relevant product market
       should be defined, in line with previous Commission decisions, as the overall retail
       market for fixed line telephony services, including VoIP services.
(19) In previous decisions, the Commission considered that a distinction between local /
       national and international calls as well as between residential and business
       customers may not be relevant.10 The Commission did not take a definitive view
       with regard to these possible further segmentations of the retail fixed telephony
       services market. The Commission concluded however that traditional fixed voice
       services and managed VoIP services are interchangeable within a single market for
       the retail supply of fixed telephony services.11
(20) For the purpose of the present decision, the exact product market definition can be
       left open as the Transaction does not give rise to serious doubts as to its
       compatibility with the internal market under any possible market definition.
         4.2.2.     Geographic market definition
(21) The Notifying Party considers the market to be national in scope, based on the
       Commission's precedents.
(22) The Commission considers the market for the supply of fixed telephony services to
       be national in scope, as this reflects the continuing importance of the role of
       national regulation in the telecommunications sector, the supply of upstream
       wholesale services on a national basis, as well as the fact that the pricing policies
       of telecommunications providers are predominantly national.12
8   Commission decision of 26 April 2006 in case COMP/M.3916 – T-Mobile Austria/Tele.ring, recital
    19; Commission decision of 20 September 2013 in case COMP/M.6990 – Vodafone/Kabel
    Deutschland, recitals 218-219.
9   Commission decision of 3 July 2012 in case M.6584 – Vodafone/Cable&Wireless, recital 11.
10 Commission decision of 29 June 2009 in case M.5532 – Carphone Warehouse/Tiscali UK, recital 37.
11 Commission decision of 20 September 2013 in case M.6990 – Vodafone/Kabel Deutschland, recitals
    130-131.
12 Commission decision of 7 December 2006 in case M.4442 – Carphone Warehouse Group plc/AOL
    UK, recital 22.
                                                     4
 ---pagebreak--- 4.3.    Wholesale mobile call termination services
(23) When someone calls a mobile phone connected to a different network that call is
      terminated on the network of the receiving mobile phone. In order for a retail
      mobile service provider to be able to provide calls to a different network, it must
      purchase wholesale terminations services on these other networks. This is done
      through interconnection agreements between the various network operators.
        4.3.1.   Product market definition
(24) The Notifying Party submits that each individual mobile network constitutes a
      separate market for call termination because the operator transmitting the call can
      reach the intended recipient only through the operator of the network to which the
      recipient is connected. There is thus no substitute for call termination on each
      individual network.
(25) The Commission considers that there is no substitute for call termination on each
      individual network since the operator transmitting the outgoing call can reach the
      intended recipient only through the operator of the network to which the recipient
      is connected.
(26) The Commission concludes, in line with previous decisions, that termination on
      each individual mobile network constitutes a separate product market. 13
        4.3.2.   Geographic market definition
(27) In line with previous Commission decisions, the Notifying Party submits that the
      market for mobile call termination services should be considered national in scope.
(28) The Commission concludes, in line with previous decisions14, that the market for
      mobile call termination services is national in scope, as each wholesale market for
      call termination corresponds to the dimensions of the operator’s network and
      therefore is limited to the national territory of the operator's network.
4.4.    Wholesale fixed call termination services
(29) Call termination is the service provided by a network operator on the supply side to
      other network operators on the demand side, whereby a call originating in a demand
      side operator's network is delivered to a user in the supply side operator's network.
      This service is required by every originating operator, as it is necessary for its
      customers to be able to communicate with the customers of other networks. Call
      termination is therefore a wholesale service that is resold or used as an input for the
      provision of downstream retail telephony services.
        4.4.1.   Product market definition
(30) In line with previous Commission decisions, the Notifying Party submits that the
      relevant product market is the wholesale market for call termination on each
      individual fixed network.
13  Commission decision of 1 September 2016 in case M.7758, Hutchison 3G Italy / Wind / JV, recital
    192: Commission decision of 2 July 2014 in Case M.7018 - Telefónica Deutschland/E-Plus, recital 89.
14 Commission decision of 1 September 2016 in case M.7758, Hutchison 3G Italy / Wind / JV, recital
    196; Commission decision of 2 July 2014 in Case M.7018 - Telefónica Deutschland/E-Plus, recital 91.
                                                     5
 ---pagebreak--- (31) The Commission considers that there is no substitute for call termination on each
       individual network since the operator transmitting the outgoing call can reach the
       intended recipient only through the operator of the network to which the recipient
       is connected.15
(32) The Commission considers that, as regards wholesale call termination services,
       termination on each individual fixed network constitutes a separate product market.
         4.4.2.  Geographic market definition
(33) In line with previous Commission decisions, the Notifying Party considers the
       relevant geographic market for call termination services on fixed networks to be
       national in scope. This is primarily due to regulatory barriers as the geographic
       scope of licenses is in principle limited to areas which do not extend beyond the
       borders of a Member State.
(34) In previous decisions, the Commission considered the geographic market to be
       national in scope.16
(35) The Commission concludes that the wholesale market for fixed call termination
       services is national in scope, considering that the geographic scope of each
       wholesale market for call termination should correspond to the dimensions of the
       operator’s network, which is limited to national borders due to regulatory barriers.
4.5.     Wholesale international roaming services
(36) For a provider of retail mobile services to be able to provide its end customers with
       telecommunications services outside their home countries, it enters into wholesale
       roaming agreements with providers of wholesale international roaming on other
       national markets. Roaming consists of both terminating calls and originating calls.
(37) Retail mobile service providers sometimes have preferred roaming partners in
       certain countries. This means that the preferred partners' network will be used in
       the first instance when it has coverage and the mobile user has not manually
       chosen a different network. A home network will normally have multiple
       agreements with operators in a particular country in order to provide optimal
       coverage.
         4.5.1.  Product market definition
(38) In line with previous Commission decisions, the Notifying Party submits that there
       is a relevant product market for wholesale international roaming services,
       comprising both terminating calls and originating calls.
(39) Wholesale international roaming services are regulated. 17 Mobile network operators
       must meet all reasonable requests for wholesale roaming access under a
15  Commission decision of 2 July 2014 in case M.7231, Vodafone / Ono, recital 63.
16  Commission decision of 20 September 2013 in case M. 6990 – Vodafone/Kabel Deutschland, recital
    121; Commission decision of 1 March 2010 in Case M.5650 - T-Mobile/Orange, recital 38.
17 Regulation (EU) No 531/2012 of the European Parliament and of the Council of 13 June 2012 on
    roaming on public mobile communications networks within the Union (OJ 2012 L 172/10), last
    amended by Regulation (EU) 2017/920 of the European Parliament and of the Council of 17 May
    2017 (OJ 2017 L 147/1) (the "Roaming Regulation").
                                                     6
 ---pagebreak---        reference offer and wholesale charges for the making of regulated roaming services
       (voice, message and data roaming) are capped.
(40) The Commission concludes, in line with previous decisions, that the market for
       international roaming comprising both terminating calls and originating calls
       constitutes a separate product market. 18 For originating calls while roaming, the
       foreign or visited mobile network is used to make phone calls when abroad and a
       wholesale roaming charge is paid by the home network to the visited network. For
       terminating calls, the call is routed by the home network to the visited mobile
       network and the home network pays for the international carriage of the call and
       the normal termination charge to the visited network. Demand for wholesale
       international roaming services comes first from foreign mobile operators who wish
       to provide their own customers with mobile services outside their own network and
       also downstream from subscribers wishing to use their mobile telephones outside
       their own countries.
         4.5.2.    Geographic market definition
(41) In line with previous Commission decisions, the Notifying Party submits that the
       relevant geographic scope of the market for the supply of wholesale international
       roaming services is national.
(42) In previous decisions, the Commission found that the wholesale market for
       international roaming is national in scope, given that wholesale international
       agreements can be concluded only with companies which have an operating licence
       in the relevant country and the licences to provide mobile services are restricted to
       a national territory.19
(43) The Commission concludes that the markets for international roaming are national.
5.      COMPETITIVE ASSESSMENT
(44) According to the information submitted by the Notifying Party, the Transaction
       does not give rise to any horizontally affected markets.20
18  Commission decision of 1 September 2016 in case M.7758, Hutchison 3G Italy / Wind / JV, recitals
   182-184; Commission decision of 12 December 2012 in Case COMP/M.6497 - Hutchison 3G
   Austria/Orange Austria, recital 64.
19 Commission decision of 28 May 2014 in case M. 6992 – H3G/Telefónica Ireland, recital 151;
   Commission decision of 12 December 2012 in case M.6497 – Hutchison 3G Austria/Orange Austria,
   recital 78; Commission decision of 1 March 2010 in case M.5650 – T-Mobile/Orange, recital 35;
   Commission decision of 20 August 2007 in case M.4748 – T-Mobile/Orange Netherlands, recital 27;
   Commission decision of 26 April 2006 in case M.3916 – T-Mobile Austria/Tele.ring, recital 28;
   Commission decision of 20 September 2013 in case M. 6990 – Vodafone/Kabel Deutschland, recital
   252.
20 Where this Decision makes reference to "affected markets", it refers to instances where: for horizontal
   overlaps, both Parties are engaged in business activities in the same relevant market and where the
   concentration will lead to a combined market share of 20% or more; for vertical overlaps, where one
   or more of the Parties are engaged in business activities in a relevant market, which is upstream or
   downstream of a relevant market in which any other party to the concentration is engaged, and any of
   their individual or combined market shares at either level is 30% or more, regardless of whether there
   is or is not any existing supplier/customer relationship between the Parties. See section 6.3. of Annex I
   (Form CO relating to the notification of a concentration pursuant to regulation (EC) No 139/2004) of
   Commission Implementing Regulation (EU) No 1269/2013 of 5 December 2013 amending
                                                        7
 ---pagebreak--- (45) The Transaction gives rise to a number of vertically affected markets in the
      telecommunications sector, as can be seen from the following table:
                    Upstream markets                               Downstream markets
       Wholesale mobile call termination                 (i) Retail mobile telecommunications
       services in:                                      services in:
       - Czech Republic (PPF)                            - Hungary (Telenor)
       - Slovakia (PPF)                                  - Bulgaria (Telenor)
                                                         (ii) Retail fixed telephony services in:
                                                         - Bulgaria (Telenor)
       Wholesale mobile call termination                 (i) Retail mobile telecommunications
       services in:                                      services in:
       - Hungary (Telenor)                               - Czech Republic (PPF)
       - Bulgaria (Telenor)                              - Slovakia (PPF)
                                                         (ii) Retail fixed telephony services in:
                                                         - Czech Republic (PPF)
                                                         - Slovakia (PPF)
       Wholesale fixed call termination in:              (i) Retail mobile telecommunications
                                                         services in:
       - Czech Republic (PPF)
                                                         - Hungary (Telenor)
       - Slovakia (PPF)
                                                         - Bulgaria (Telenor)
                                                         (ii) Retail fixed telephony services in:
                                                         - Bulgaria (Telenor)
       Wholesale fixed call termination in:              (i) Retail mobile telecommunications
                                                         services in:
       - Bulgaria (Telenor)
                                                         - Czech Republic (PPF)
                                                         - Slovakia (PPF)
                                                         (ii) Retail fixed telephony services in:
                                                         - Czech Republic (PPF)
   Commission Regulation (EC) No 802/2004 implementing Council Regulation (EC) No 139/2004 on
   the control of concentrations between undertakings (OJ L 336, 14.12.2013, p. 1-36).
                                                      8
 ---pagebreak---                                                    - Slovakia (PPF)
      Wholesale international        roaming Retail mobile telecommunications
      services in:                                 services in:
      - Czech Republic (PPF)                       - Hungary (Telenor)
      - Slovakia (PPF)                             - Bulgaria (Telenor)
      Wholesale international        roaming Retail mobile telecommunications
      services in:                                 services in:
      - Hungary (Telenor)                          - Czech Republic (PPF)
      - Bulgaria (Telenor)                         - Slovakia (PPF)
5.1.  Wholesale market for mobile call termination services – Retail market for
      fixed telephony services and retail market for mobile telecommunications
      services
(46) PPF is active on the market for wholesale mobile call termination services on its
     own networks in the Czech Republic and in Slovakia. The Telenor Target
     Companies are also active on this market in Bulgaria and Hungary and provide
     mobile call termination services for their own networks.
(47) This wholesale market, where the Parties have a 100% market share in their
     respective networks ("one net – one market" principle) is upstream of the markets
     for the retail supply of fixed telephony services and retail supply of mobile
     telecommunication services, where the Parties have the following market shares:
                        Retail Mobile Telecommunications Services
                           Czech            Slovakia          Bulgaria       Hungary
                         Republic
      PPF                  [30-40]%        [20-30]%                -             -
      Telenor                 -                  -              [30-40]%      [20-30]%
      Target
      Companies
                              Retail Fixed Telephony Services
                           Czech Republic              Slovakia           Bulgaria
      PPF                    [90-100]%                  [0-5]%                -
      Telenor Target               -                        -             [10-20]%
      Companies
                                               9
 ---pagebreak---       Source: Form CO
        5.1.1.     The Notifying Party's views
(48) The Notifying Party submits that the Transaction cannot give rise to any
      competition concerns considering that:
      -     the markets for provision of wholesale mobile call termination services are
            subject to an ex ante regulation by national telecommunications authorities
            which makes it technically impossible to refuse access to or price discriminate
            against other network operators;
      -     in the vast majority of cases it is impossible to know the identity of the
            customer purchasing termination because international calls are mostly made
            over international carriers who act as intermediaries between the
            telecommunication operators;
      -     the call termination in the Czech Republic and Slovakia is only of minor
            importance to the Telenor Target Companies and their competitors. Similarly,
            the call termination in Bulgaria and Hungary appears to be of negligible
            importance to PPF and their competitors.
        5.1.2.    The Commission's assessment
(49) The Commission considers that the Transaction does not give rise to serious doubts
      as to its compatibility with the internal market in relation to the vertical link
      between the upstream markets for wholesale mobile call termination services and
      the downstream markets for retail supply of fixed telephony services and retail
      supply of mobile telecommunication services, for the following reasons.
(50) First, the Commission notes that there are regulatory obligations applying to the
      wholesale mobile call termination markets.21 Those regulatory obligations include
      access to specific network facilities, transparency (including publication of draft
      interconnection agreements on the network operator’s website), non-discrimination
      and price control.
(51) Second, telephonic traffic flows between the Czech Republic, Slovakia, Hungary
      and Bulgaria are extremely limited and any increase by the merged entity of its
      termination charges (if possible without the need for regulatory approvals) would
      have little or no impact on the cost structure of the merged entities' competitors in
      these countries. Nor would the merged entity have the incentive to make such
      increases due to the small traffic volume concerned.
21 With respect to the Czech Republic, see Commission Decision of March 16, 2016 in case
   CZ/2016/1843, Wholesale market for the voice call termination on individual mobile networks in the
   Czech Republic and corresponding national market review performed by the national regulatory
   authority. With respect to Bulgaria, see Commission Decision of November 21, 2016 in case
   BG/2016/1924, Call termination on individual mobile telephone networks in Bulgaria and
   corresponding national market review performed by the national regulatory authority. With respect to
   Slovakia, see Commission Decision of December 15, 2016 in case SK/2016/1956, Wholesale voice
   call termination on individual mobile networks in Slovakia and corresponding national market review
   performed by the national regulatory authority. With respect to Hungary, see Commission Decision of
   March 05, 2015 in case HU/2015/1705, Wholesale voice call termination on individual mobile
   networks in Hungary and corresponding national market review performed by the national regulatory
   authority.
                                                     10
 ---pagebreak--- (52) Third, the Commission notes that none of the respondents to the market
       investigation raised any concerns related to vertical issues arising from the
       Transaction on the market for wholesale mobile call termination services on the
       one hand, and the retail supply of fixed telephony services and retail mobile
       telecommunications services on the other hand.
(53) In light of the analysis above, the Commission concludes that the Transaction does
       not give rise to serious doubts as to its compatibility with the internal market in
       relation to the vertical link between the upstream markets for wholesale mobile call
       termination services and the downstream markets for retail supply of fixed
       telephony services and retail mobile telecommunications services.
5.2.     Wholesale market for fixed call termination services – Retail market for
         fixed telephony services and retail market for mobile telecommunications
         services
(54) PPF is active on the market for wholesale fixed call termination services on its own
       networks in the Czech Republic and in Slovakia. The Telenor Target Companies
       are also active on this market in Bulgaria. The wholesale market for fixed call
       termination services where the Parties have a 100% market share in their respective
       networks ("one net – one market" principle) is upstream of the markets for the retail
       supply of fixed telephony services and for the retail supply of mobile
       telecommunications services, where the Parties have the market shares indicated in
       the tables in recital (47) above.
         5.2.1.   The Notifying Party's views
(55) The Notifying Party submits that the Transaction cannot give rise to any
       competition concerns considering that:
       -     the markets for provision of wholesale fixed call termination services are
             subject to an ex ante regulation by national telecommunications authorities
             which makes it technically impossible to refuse access to or price discriminate
             against other network operators;
       -     in the vast majority of cases it is impossible to know the identity of the
             customer purchasing termination because international calls are mostly made
             over international carriers who act as intermediaries between the
             telecommunication operators;
       -     the call termination in the Czech Republic and Slovakia is only of minor
             importance to the Telenor Target Companies and their competitors. Similarly,
             the call termination in Bulgaria and Hungary appears to be of negligible
             importance to PPF and their competitors.
         5.2.2.   The Commission's assessment
(56) First, the Commission notes that there are regulatory obligations applying to the
       wholesale fixed call termination markets.22 Those regulatory obligations include
22 With respect to the Czech Republic, see Commission Decision of November 24, 2016 in case
    CZ/2016/1928, Wholesale markets for call termination on individual public telephone networks
    provided at a fixed location in the Czech Republic – remedies and corresponding national market
    review performed by the national regulatory authority. With respect to Bulgaria, see Commission
                                                    11
 ---pagebreak---         access to specific network facilities, transparency (including publication of draft
        interconnection agreements on the network operator’s website), non-discrimination
        and price control.
(57) Second, telephonic traffic flows between the Czech Republic, Slovakia, Hungary
        and Bulgaria are extremely limited and any increase by the merged entity of its
        termination charges (if possible without the need for regulatory approvals) would
        have little or no impact on the cost structure of the merged entities' competitors in
        these countries. Nor would the merged entity have the incentive to make such
        increases due to the small traffic volume concerned.
(58) Third, the Commission notes that no respondent to the market investigation raised
        any issues related to vertical competition concerns arising from the Transaction on
        the market for fixed call termination services on the one hand, and the markets for
        retail supply of fixed telephony services and of mobile telecommunications services
        on the other hand.
(59) In light of the analysis above, the Commission concludes that the Transaction does
        not give rise to serious doubts as to its compatibility with the internal market in
        relation to the vertical link between the upstream markets for wholesale fixed call
        termination services and the downstream markets for retail supply of fixed
        telephony services and retail supply of mobile telecommunications services.
5.3.      Wholesale market for international roaming services – Retail market for
          mobile telecommunications services
(60) PPF is active on the market for wholesale international roaming services on its
        own mobile networks in the Czech Republic and in Slovakia. The Telenor Target
        Companies are also active on this market on their own networks in Bulgaria and in
        Hungary. The wholesale market for international roaming services is upstream of
        the markets for the retail supply of mobile telecommunication services, where the
        Parties have the market shares indicated in the tables in recital (47) above.
          5.3.1.    The Notifying Party's views
(61) The Notifying Party submits that the Transaction cannot give rise to any
        competition concerns considering that:
        -     following the Transaction, the merged entity's competitors in the retail markets
              for mobile telecommunication services will continue to have at least two
              alternative operators in each of the Czech Republic, Slovakia, Bulgaria and
              Hungary from which to purchase international roaming services;
        -     roaming activities are subject to EU regulation which imposes a price cap on
              the wholesale prices that Mobile Network Operators ("MNOs") can charge
              from their roaming customers and includes obligation of MNOs to meet all
              reasonable requests for access to their network;
    Decision of May 26, 2016 in case BG/2016/1862, Wholesale call termination on individual public
    telephone networks provided at a fixed location in Bulgaria and corresponding national market review
    performed by the national regulatory authority. With respect to Slovakia, see Commission Decision of
    February 22, 2018 in case SK/2018/2051, Wholesale voice call termination on individual public
    telephone networks provided at a fixed location in Slovakia – remedies and corresponding national
    market review performed by the national regulatory authority.
                                                       12
 ---pagebreak---      -     The roaming charges in each interested Member State represent a very small
           percentage of the costs incurred by mobile operators. Therefore, any changes
           in the roaming costs will have no significant impact on the relevant
           competitors’ price structure;
     -     the revenues generated by PPF's end customers roaming in Bulgaria and
           Hungary, as well as by the Telenor Target Companies' end customers roaming
           in the Czech Republic and Slovakia represent less than [0-10]% of the total
           wholesale international roaming revenues generated by the mobile operators
           in the respective Member States.
       5.3.2.   The Commission's assessment
(62) The Commission considers that the Transaction does not give rise to serious doubts
     as to its compatibility with the internal market in relation to the vertical link
     between the upstream markets for wholesale international roaming services and the
     downstream markets for the retail supply of mobile telecommunication services.
(63) The Commission notes that the market for wholesale international roaming
     activities is subject to sector-specific Union regulation, which prevents mobile
     operators from refusing access to their network and from charging excessive
     termination fees. Under the Roaming Regulation, MNOs must meet all reasonable
     requests for wholesale roaming access and MNOs are bound by the price cap
     imposed by the Roaming Regulation on the wholesale prices that MNOs can
     charge from their roaming customers. Key obligations under the regulation include
     an obligation to meet all reasonable requests, an obligation to publish a reference
     offer, caps on wholesale and retail charges (for calls, SMS messages and data
     services), and transparency and information requirements.            The Roaming
     Regulation therefore effectively prevents MNOs from refusing access to their
     respective network and from charging excessive termination fees.
(64) Furthermore, the Commission notes that no respondent to the market investigation
     raised any issues related to vertical competition concerns arising from the
     Transaction on the market for wholesale international roaming services on the one
     hand, and the market for retail supply of mobile telecommunications services on
     the other hand.
(65) In light of the analysis above, the Commission concludes that the Transaction does
     not give rise to serious doubts as to its compatibility with the internal market in
     relation to the vertical link between the upstream markets for wholesale
     international roaming services and the downstream markets for the retail supply of
     mobile telecommunication services.
                                              13
 ---pagebreak--- 6.    CONCLUSION
(66) For the above reasons, the European Commission has decided not to oppose the
     notified operation and to declare it compatible with the internal market and with
     the EEA Agreement. This decision is adopted in application of Article 6(1)(b) of
     the Merger Regulation and Article 57 of the EEA Agreement.
                                                   For the Commission
                                                   (Signed)
                                                   Margrethe VESTAGER
                                                   Member of the Commission
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