CELEX: 32014M7109
Language: en
Date: 2014-04-14 00:00:00
Title: Commission Decision of 14/04/2014 declaring a concentration to be compatible with the common market (Case No COMP/M.7109 - DEUTSCHE TELEKOM / GTS) according to Council Regulation (EC) No 139/2004 (Only the English text is authentic)

|[pic]                             |EUROPEAN COMMISSION                                                                                      |

Brussels, 14/04/2014
C(2014) 2674 final

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|139/2004 concerning non-disclosure of business secrets and other       |                                                                       |                                                                       |
|confidential information. The omissions are shown thus […]. Where      |                                                                       |                                                                       |
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To the notifying party:

Dear Sir/Madam,

Subject:    Case No COMP/M.7109 – Deutsche Telekom/ GTS
Commission decision pursuant to Article 6(1)(b) of Council Regulation No 139/2004[1]

Table of Contents

1.    THE PARTIES      5
2.    THE OPERATION    5
3.    EU DIMENSION     5
4.    PRODUCT AND GEOGRAPHIC MARKET DEFINITIONS    6
4.1.  International markets  6
4.1.1.      Global telecommunications services     6
4.1.1.1.    Product market definition   6
4.1.1.2.    Geographic market definition     7
4.1.2.      Wholesale Internet connectivity  7
4.1.2.1.    Product market definition   7
4.1.2.2.    Geographic market definition     8
4.2.  National retail markets     8
4.2.1.      The retail market for business connectivity services    8
4.2.1.1.    Product market definition   8
4.2.1.2.    Geographic market definition     9
4.2.2.      The market for retail supply of fixed voice services    10
4.2.2.1.    Product market definition   10
4.2.2.2.    Geographic market definition     11
4.2.3.      The market for retail supply of mobile telecommunication services to end customers  11
4.2.3.1.    Product market definition   11
4.2.3.2.    Geographic market definition     12
4.2.4.      The markets for retail supply of fixed internet access services    13
4.2.4.1.    Product market definitions  13
4.2.4.2.    Geographic market definition     13
4.2.5.      The retail market for bulk SMS services      14
4.2.5.1.    Product market definitions  14
4.2.5.2.    Geographic market definition     14
4.3.  National wholesale markets  15
4.3.1.      The market for wholesale leased lines  15
4.3.1.1.    Product market definition   15
4.3.1.2.    Geographic market definition     16
4.3.2.      The market for the wholesale provision of domestic call transit services on fixed networks     17
4.3.2.1.    Product market definition   17
4.3.2.2.    Geographic market definition     17
4.3.3.      The wholesale market for end-to-end calls    18
4.3.3.1.    Product market definition   18
4.3.3.2.    Geographic market definition     18
4.3.4.      The markets for call termination services    19
4.3.4.1.    Product market definitions  19
4.3.4.2.    Geographic market definitions    19
4.3.5.      The wholesale market for termination and hosting of non-geographic numbers    20
4.3.5.1.    Product market definition   20
4.3.5.2.    Geographic market definition     20
4.3.6.      The markets for call origination services    21
4.3.6.1.    The wholesale market for call origination on the public telephone network at a fixed location  21
4.3.6.2.    The wholesale market for access and call origination services on mobile networks          21
4.3.7.      The markets for wholesale provision of broadband Internet access   22
4.3.7.1.    Product market definition   22
4.3.7.2.    Geographic market definition     23
5.    COMPETITIVE ASSESSMENT 23
5.1.  Hungary    23
5.1.1.      Parties' activities   23
5.1.2.      Horizontally affected markets    24
5.1.2.1.    Market for wholesale leased lines      24
5.1.2.2.    Market for the wholesale domestic call transit on fixed networks   30
5.1.2.3.    Market for retail business connectivity      31
5.1.2.4.    Market for the retail supply of fixed voice services    33
5.1.2.5.    Market for the retail supply of fixed internet access   34
5.1.3.      Vertically affected markets 35
5.1.3.1.    Wholesale leased lines – Retail business connectivity   35
5.1.3.2.    Wholesale leased lines – retail mobile telecommunication services to end customers  38
5.1.3.3.    Wholesale provision of domestic call transit services on fixed network – retail supply of fixed voice services and retail  supply  of
mobile telecommunications services to end customers      42
5.1.3.4.    Wholesale market for end-to-end calls – retail supply of fixed voice services             46
5.1.3.5.    Wholesale resale of broadband offering – retail business connectivity    48
5.1.3.6.    Wholesale broadband offering – retail supply of fixed voice services     50
5.1.3.7.    Other vertically affected markets      51
5.1.4.      Conglomerate effects  55
5.1.4.1.    Markets for retail business connectivity and retail supply of mobile telecommunications services     55
5.2.  Romania    56
5.2.1.      Parties' activities   56
5.2.2.      Horizontally affected markets    56
5.2.2.1.    Wholesale leased lines market    57
5.2.2.2.    Retail market for business connectivity      62
5.2.2.3.    Market for retail supply of fixed voice services  65
5.2.2.4.    Wholesale market for provision of call transit services on fixed networks     66
5.2.2.5.    Market for retail supply of fixed internet access services    66
5.2.3.      Vertically affected markets 67
5.2.3.1.    Wholesale leased lines market – Retail business connectivity market      67
5.2.3.2.    Wholesale leased lines market – Retail supply of mobile telecommunication services to end customers  70
5.2.3.3.    Other vertically affected markets      71
5.3.  The Czech Republic     76
5.3.1.      Parties' activities   76
5.3.2.      Horizontal overlaps   76
5.3.2.1.    Retail market for business connectivity      77
5.3.2.2.    Wholesale of domestic call transit services market      79
5.3.2.3.    Retail bulk of SMS    81
5.3.3.      Vertical overlaps     82
5.3.3.1.    Wholesale regulated markets 83
5.3.3.2.    Wholesale leased lines market - retail supply of mobile telecommunication services to end customers  85
5.3.3.3.    Markets vertically related to the wholesale market for domestic call transit services          86
5.3.3.4.    Vertical relationship between wholesale provision of domestic call transit services on fixed network  and  retail  supply  of  mobile
telecommunication services   87
5.3.3.5.    Market for wholesale access and call origination on mobile networks – Market for  the  retail  supply  of  mobile  telecommunications
services    90
5.3.3.6.    Market for termination and hosting of non-geographic numbers – Market for retail supply of mobile telecommunications services    93
5.3.4.      Conglomerate effects  95
5.3.4.1.    Retail markets for fixed voice services and mobile telecommunications services            95
5.4.  Poland     97
5.4.1.      Parties' activities   97
5.4.2.      Vertical links   97
5.4.2.1.    Wholesale regulated markets 97
5.4.2.2.    Market for termination and hosting of non-geographic numbers – Several vertically related downstream markets    99
5.5.  International market for Global Telecommunications Services   102
6.    CONCLUSION 103

    1) On 11 March 2014, the European Commission received a notification of a proposed concentration pursuant to Article 4 of Council  Regulation
       (EC) No 139/2004[2] by which Deutsche Telekom AG ("DT") acquires within the meaning of Article 3(1)(b) of the Merger Regulation control of
       the whole of GTS Central Europe ("GTS CE")[3] by way of purchase of shares (the "Transaction").

    2) DT and GTS CE are together designated hereinafter as the "Parties".

       THE PARTIES

    3) DT provides fixed and mobile telecommunication services, internet access services and internet protocol television  (“IPTV”)  services  to
       residential and business customers in Europe. DT also  provides  telecommunications  services  to  other  carriers  and  internet  service
       providers (“ISPs)” at wholesale level as well as tailor-made information and communication technology (“ICT”) services to  large  business
       customers on a global scale.

    4) GTS CE is an infrastructure-based provider of telecommunications  services  and  tailor-made  ICT  solutions  for  business,  carrier  and
       government customers in Poland, the Czech Republic, Hungary, Romania and Slovakia. It operates a network of fibre optic and  data  centres
       in Central and Eastern Europe.

       THE OPERATION

    5) Pursuant to a Share Purchase Agreement ("SPA") of 8 November 2013 between DT and Consortium 1 S.à.r.l, the current owner  of  GTS  CE,  DT
       will acquire 100% of the shares, preferred equity certificates and convertible equity certificates issued by Consortium 1 S.à.r.l. DT will
       thereby acquire sole control over GTS CE in Hungary, Romania, the Czech Republic and Poland . According to the  SPA,  GTS  CE's  Slovakian
       Business will be carved out of the proposed transaction.[4] DT will therefore acquire sole control over GTS CE in  Hungary,  Romania,  the
       Czech Republic, and Poland.

    6) The proposed transaction therefore constitutes a concentration within the meaning of Article 3(1)(b) of the Merger Regulation.

       EU DIMENSION

    7) The undertakings concerned have a combined aggregate worldwide turnover of more than EUR 5 000 million[5] (DT: EUR 58 200 million; GTS CE:
       EUR […]). Each of them has an EU-wide turnover in excess of EUR 250 million (DT: EUR […]  million;  GTS  CE:  EUR  […]  million).  Neither
       company achieves more than two-thirds of its aggregate EU-wide turnover within one Member State.

    8) The notified operation therefore has an EU dimension within the meaning of Article 1(2) of the Merger Regulation.

       PRODUCT AND GEOGRAPHIC MARKET DEFINITIONS

    9) The Parties are active in the provision of telecommunication services, comprising several types of closely related services.  The  Parties
       overlap in Hungary, Romania the Czech Republic and Poland.

1 International markets

1 Global telecommunications services

1 Product market definition

   10) Global telecommunications services (GTS) are telecommunications services linking a number of different customer locations, generally in at
       least two different continents and across a larger number of different countries. They are generally purchased by multinational  companies
       with presence in many countries and a number of continents. The services provided are enhanced services to provide customers with  package
       solutions including virtual private networks ("VPN") for both voice and data services and advanced functionalities.[6]

   11) The Parties submit that GTS are supplied at retail level and wholesale level. In the  latter  case,  they  can  also  be  referred  to  as
       "international carrier services". According to the Parties, wholesale GTS comprise (i) the lease of transmission  capacity  and  (ii)  the
       provision of related services to third party telecommunication traffic carriers and service providers and are an input for retail GTS.

   12) The Parties submit that the retail GTS market should not be segmented according to different types  of  services  as  providers  generally
       provide a package of services and most customers require to be supplied with integrated services.

   13) In Vodafone / Cable&Wireless[7], the Commission considered a possible distinction between retail GTS and  international  carrier  services
       but ultimately left the exact product market definition open. While the Commission considered a possible distinction between the lease  of
       transmission capacity and the provision  of  services  to  third-party  carriers,  it  ultimately  left  open  the  exact  product  market
       definition.[8]

   14) In the present case, the exact definition of the product market can be  left  open,  as  the  proposed  transaction  does  not  raise  any
       competitive concern under any plausible market definition.

2 Geographic market definition

   15) The Parties submit that the geographic scope of both the wholesale and retail GTS markets is  global.  From  a  demand  side  perspective,
       multinational companies tender their retail GTS needs globally or at least EEA-wide. A DT internal analysis of the requests for  proposals
       during the year 2012 available to DT shows that over [90-100]% of these requests had a global or Europe-wide scope.  From  a  supply  side
       perspective, the main providers of retail GTS offer these services across the globe. Despite the fact that their network  does  not  cover
       the entire globe, such providers purchase wholesale connectivity products to put together their competitive retail solutions.

   16) One respondent to the market investigation pointed out that the retail GTS market should be defined regional in scope covering the Central
       and Eastern European ("CEE") countries, as demand side considerations and homogeneous prices in this area  would  indicate  that  a  wider
       scope (global or EEA-wide) may not be relevant.

   17) In past decisions, the Commission has considered the GTS market(s) to be global in scope, although it ultimately  left  open  the  precise
       definition of the geographic scope of this market.[9] The Commission considered that from a demand-side perspective, retail GTS  customers
       are mainly internationally active multinational companies.[10] It also considered that most suppliers have an international  portfolio  of
       customers and are in a position of provisioning GTS on a worldwide basis.[11] A further element supporting a global market  definition  is
       that the competitive constraints on the pricing of GTS providers come from alternative solutions available from global providers of GTS.

   18) While the Commission's past decisional practice indicates that global telecommunication services are global in scope, in the present case,
       the exact definition of the geographic market can be left open, as the proposed transaction does not raise any competitive  concern  under
       any plausible market definition.

2 Wholesale Internet connectivity

1 Product market definition

   19) The Internet works as a "network of networks". A local ISP who wants to offer Internet services to end-customers has to connect with other
       networks in order to allow his end-customers to exchange traffic with other end  customers  /  content  providers  beyond  its  own  local
       network. In order to reach networks in far distance, an ISP has to connect to larger networks which can link both ISPs to each other. Such
       connectivity can be acquired either by peering (the mutual and free  exchange  of  traffic  between  two  networks)  or  by  transit  (the
       provision, for a fee, of access to the Internet via a network). Peering offers access only to the customers of the other network whereas a
       transit supplier gives access to the whole Internet. Peering usually occurs between ISPs of like  size  and  geographical  reach.  Smaller
       networks usually can obtain connectivity to the larger ones only by paying for transit.

   20) In the Parties' view, there is no need to segment the market for Internet connectivity along the possible distinction between transit  and
       peering as they are close substitutes satisfying similar customer needs, namely Internet connectivity.

   21) In past decisions, the Commission considered a market for internet  connectivity.  In  addition,  the  Commission  considered  a  possible
       segmentation between peering and transit, but ultimately left the exact product market definition open.[12]

   22) In the present case, the exact definition of the product market can  be  left  open  as  the  proposed  transaction  does  not  raise  any
       competitive concern under any plausible market definition.

2 Geographic market definition

   23) The Parties submit that the geographic scope of this market is global as both demand and supply are worldwide. Content providers  want  to
       reach as many end customers as possible and ISPs need connectivity to all IP addresses in the public domain in order to satisfy the demand
       of end customers.

   24) In past decisions, the Commission considered the geographic scope of the market for internet connectivity as being global  but  ultimately
       left the exact market definition open.[13]

   25) In the present case, the exact definition of the geographic market can be left open  as  the  proposed  transaction  does  not  raise  any
       competitive concern under any plausible market definition.

2 National retail markets

1 The retail market for business connectivity services

1 Product market definition

   26) The retail market for business connectivity includes fixed telecommunications services purchased  by  large  businesses,  enterprises  and
       public sector customers in order to provide data connectivity between multiple sites.  In  its  decisional  practice,  the  Commission[14]
       considered potential subdivisions into: (i) broadband access for large business customers; [15]  (ii)  leased  lines;[16]  and  (iii)  VPN
       services.[17]

   27) The Parties disagree with such sub-segmentation, as most customers demand a variety of products and as they actually switch  from  one  to
       another. More specifically, the Parties state that there is a general trend to switch from legacy layer-2 services (primarily leased lines
       and Ethernet services) to layer-3 connectivity (notably VPN services) that do not specifically require leased lines.

   28) In both Hungary and Romania, the market investigation results were mixed as to whether broadband access for large customers,  leased  line
       offers and VPN service offers were comparable.[18] However,  in  both  countries,  a  large  majority  of  customers  of  retail  business
       connectivity stated that they would switch from leased lines to VPN services in case the price of the former increased permanently by 5 to
       10%.[19] As regards supply-side substitutability, all competitors of retail business connectivity  confirmed  that  they  offered  several
       types of business connectivity packages.[20] In Hungary, from a demand-side perspective, the majority  of  customers  of  retail  business
       connectivity purchase at least broadband access services and leased lines, while in Romania they purchase all three services, or at  least
       broadband access and VPN services.[21]

   29) In the light of the results of the market investigation, the Commission considers that there  are  indications  that  different  types  of
       services such leased lines and VPN services form part of a market for business connectivity. In any event, the  exact  definition  of  the
       product market can be left open in this case as the proposed transaction does not raise any competitive concern under any plausible market
       definition.

2 Geographic market definition

   30) In its decisional practice, the Commission has found that the retail market for business connectivity was national in scope.[22]

   31) The Parties agree with this definition.

   32) Both in Hungary and Romania, all suppliers of retail business connectivity  stated  that  they  supplied  these  services  on  a  national
       level.[23] On the demand side, in Hungary, the majority of the  customers  of  retail  business  connectivity  responding  to  the  market
       investigation stated that they purchased these services either on a  national  level  or  at  EEA-level.[24]  In  Romania,  all  customers
       indicated that they purchased these services on a national level.

   33) Therefore, the Commission concludes that the geographic market for retail business connectivity is national in scope.

2 The market for retail supply of fixed voice services

1 Product market definition

   34) Fixed line telephony retail services comprise the provision of connection services or access (at a  fixed  location  or  address)  to  the
       public telephone network for the purpose of making and/or receiving calls and related services.

   35) In its past decision-making practice, the Commission defined a market for the retail supply of fixed voice services  that  would  comprise
       "access to the public telephone network at a fixed location  for  residential  and  non-residential  customers".[25]  The  Commission  has
       previously considered drawing a distinction between residential and non-residential customers and between local and  international  calls,
       but ultimately left the product market definition open.[26] In addition, the Commission concluded that traditional telephony  and  managed
       Voice over the Internet Protocol (VoIP) services are interchangeable within the market for the retail supply of fixed voice services.[27]

   36) In their submission, the Parties submit that the retail market for fixed voice services  comprise  not  only  legacy  voice  services  and
       managed VoIP solutions provided at fixed location but also home-zone products. Home-zone  products  consist  of  a  mobile  voice  service
       provided at a fixed location. Customers using this service receive a telephone number from the fixed numbering plan, containing  the  area
       code of the location where the service is provided. This type of product does not allow clients to switch between different cells of those
       networks.

   37) The market investigation generally confirmed the Commission's previous decisional  practice.  As  regards  the  possible  substitutability
       between legacy fixed voice and managed VoIP solutions, a majority of  the  Hungarian  fixed  voice  providers  responding  to  the  market
       investigation indicated that fixed line telephony services and managed VoIP are comparable products. In case of a 5-10%  increase  in  the
       price for fixed-line telephony services, a majority of their retail customers would switch to managed VoIP solutions.[28] As  regards  the
       possible substitutability between legacy fixed voice and Home-zone products, the results of the market  investigation  were  inconclusive.
       [29]

   38) The Commission concludes that traditional telephony and managed VoIP are interchangeable within the market for the retail supply of  fixed
       voice services. With regard to other aspects of this market, there is no need to decide on the exact definition of the product market,  as
       the proposed transaction does not raise any competition concern under any plausible market definition.

2 Geographic market definition

   39) In past decisions, the Commission considered the retail market for the retail supply of fixed voice services to be national in scope.[30]

   40) The Parties submit that, in an emerging all-IP world, the geographic scope of this market could be EEA-wide or even global.

   41) The results of the market investigation pointed towards a national scope of this market, since the  majority  of  the  respondents  supply
       retail fixed voice services at national level (Hungary). [31]

   42) In light of the results of the market investigation and its previous decisional practice,  the  Commission  considers  that  the  relevant
       geographic market for the provision of fixed-line telephony services to end customers is national in scope.

3 The market for retail supply of mobile telecommunication services to end customers

1 Product market definition

   43) In its previous decisional practice, the Commission has identified a market for the provision of all mobile telecommunication services  to
       end customers or "retail mobile services" comprising services for national and international[32] voice calls, SMS (including MMS and other
       messages), mobile Internet with data services, access to content via the mobile network and retail international roaming services.[33] The
       Commission considered possible further segmentations, but eventually left the market definition open.[34]

   44) The Parties submit that for the purpose of the competitive assessment it is  not  necessary  to  conclude  on  the  exact  product  market
       definition.

   45) All respondents to the market investigation from the supply side both in the Czech Republic and in Hungary  agree  with  the  Commission's
       precedents that this market comprises national and international voice calls, SMS and mobile internet with data services.[35]

   46) In the present case, the exact definition of the product market can  be  left  open  as  the  proposed  transaction  does  not  raise  any
       competition concern under any plausible market definition.

2 Geographic market definition

   47) In line with previous Commission decisions[36], the Parties submit that the market for the provision of mobile telecommunications services
       to end customers is national in scope.

   48) All respondents to the market investigation from the supply side in both the Czech Republic and Hungary agree with this geographic  market
       definition for the market for retail mobile telecommunication services.[37]

   49) The Commission therefore considers, for the purposes of the present  case,  that  the  geographic  market  for  the  provision  of  mobile
       telecommunications services to end customers is national in scope.

4 The markets for retail supply of fixed internet access services

1 Product market definitions

   50) The retail supply of fixed internet access services comprises standardised fixed telecommunications services purchased by small businesses
       and residential customers.[38]

   51) The Parties submit that medium and large businesses with intensive and complex requirements of data transmission services require  tailor-
       made products. On the other hand, small enterprises are satisfied with the standard products  used  for  the  residential  customers.  The
       Parties also submit that in some Member States, in particular Eastern European Member States, mobile broadband services  are  generally  a
       close substitute to fixed broadband services.

   52) The Commission has previously distinguished between (i) residential and small customers and (ii) large  business  customers[39]  based  on
       their need for Internet services. Furthermore, it considered a possible segmentation of this market between narrowband,  broadband,  cable
       modem and dedicated lines.[40] Moreover, in the Carphone Warehouse/Tiscali UK decision, the Commission concluded that mobile broadband  is
       more expensive and slower, so it may constitute a separate market, but the question was ultimately left open.[41]

   53) For the purpose of the present decision, the exact definition of the product market can be left open as the proposed transaction does  not
       raise any competitive concern under any plausible market definition.

2 Geographic market definition

   54) The parties submit that the demand for retail broadband services may be local given both the nature of the demand, and  the  heterogeneity
       of competitive conditions across geographic regions.

   55) The Commission considered in previous decisions[42] that the retail supply of fixed internet access services market is national in scope.

   56) The market investigation did not provide any indication that would justify a change in the geographic market definition.

   57) The Commission therefore concludes that there is no reason to modify its previous geographic market definition of  the  retail  market  of
       Internet access services, i.e. that the market is national.

5 The retail market for bulk SMS services

1 Product market definitions

   58) The retail market for bulk SMS services comprises conveyance of messages enabling businesses to send high  volumes  of  text  messages  to
       their customers.[43]
   59) The Parties submit that bulk messaging is a service predominantly offered by SMS aggregators and  that  this  service  is  used  by  media
       companies, enterprises, banks or consumer brands for general customer information , alerts, reminders or marketing. The aggregators act as
       intermediary between such businesses and Mobile Network Operators ("MNOs")  by  aggregating  demand  for  bulk  SMS.  The  MNO  will  then
       effectuate the physical conveyance of the message to the selected recipients.[44]

   60) In previous decisions[45], the Commission noted that retail bulk SMS services constitute a separate market from active marketing messaging
       and that the former is downstream from the possible market for the wholesale supply of bulk SMS services.

       2 Geographic market definition

   61) The Parties note that competition on this market takes place on an international level, as bulk SMS  services  are  primarily  offered  by
       international  providers  (such  as  Acision[46],  Mblox[47],  HQSMS[48],  TM4B  SMS  GATEWAY[49],  Truesenses[50],   bulkSMS.com[51]   or
       Clickatell[52]), operating in this market based on international agreements with MNOs.

   62) The Commission has considered previously that this market is national or wider in scope.[53]

   63) For the purpose of the present decision, the exact scope of the geographic market can be left open as the proposed  transaction  does  not
       raise any competitive concerns under any possible market definition.

3 National wholesale markets

1 The market for wholesale leased lines

1 Product market definition

   64) Leased lines are part-circuits that allow communication providers to connect their own networks to  end  user  sites  for  the  supply  of
       business connectivity services.[54]

   65) Telecom regulators sometimes segment the wholesale leased lines between those parts that can be considered to be the customer  access  and
       backhaul (terminating segments) and those elements that can be considered the backbone network (trunk segments). In its recommendation  on
       market definitions in the electronic communications sector, the Commission considers a separate market for terminating segments for leased
       lines.[55]

   66) The Parties submit that the market for wholesale leased lines encompasses traditional (analogue and digital SDH)  leased  lines,  Ethernet
       circuits and dark fibre. In particular, as for dark fibre, the Parties claim that dark fibre (passive infrastructure) and  managed  leased
       lines (active infrastructure) are similar products in terms of pricing and technology and therefore belong to  the  same  product  market.
       Moreover, the Parties consider that trunk segments and terminating segments of leased lines should be  defined  as  two  separate  markets
       given different technical characteristics (for instance in terms of speed) and  price  levels.  In  addition,  a  further  distinction  of
       terminating segments of leased lines should be made according to their transfer capacity, as the terminating segment of leased lines  with
       bandwidth above 2 megabit per second ("Mbps") differs from terminating segments of leased lines with bandwidth below 2 Mbps  in  terms  of
       characteristics (speed vs. security) and technology (fibre optic vs. copper).

   67) In previous decisions, the Commission considered that the market for wholesale leased lines could be further segmented between  trunk  and
       terminating segments but ultimately left the market definition open.[56] The Commission has  not  yet  considered  whether  the  wholesale
       leased lines market should be further divided into passive and active infrastructure as well as whether the terminating segment of  leased
       lines could be further segmented into terminating leased lines with bandwidth above 2 Mbps and below 2 Mbps.

   68) The market investigation was not conclusive as to whether the market for wholesale leased lines should be further segmented between  trunk
       and terminating segment.[57] In both Hungary and Romania, respondents to the market investigation are divided as to whether the trunk  and
       terminating segments of leased lines are comparable products in terms of technical characteristics and price.

   69) Respondents to the market investigation indicated that separate markets may exist between (i) the terminating segment of leased lines with
       bandwidth below 2 Mbps and the terminating segment of leased lines with bandwidth above 2  Mbps  in  Hungary[58]  (the  replies  were  not
       conclusive in Romania)[59] and (ii) between passive infrastructure (dark fibre) and  active  infrastructure  (traditional  managed  leased
       lines) both in Hungary and in Romania.[60]

   70) The Commission considers that in the present case the exact definition of the product market can be left open as the proposed  transaction
       does not raise any competition concern under any plausible market definition. The competitive assessment of the proposed transaction  will
       therefore be based on the market for wholesale leased lines further segmented into (i) trunk and terminating  segments  of  leased  lines;
       (ii) terminating leased lines with bandwidth below 2 Mbps and terminating leased lines with bandwidth  above  2  Mbps  and  (iii)  passive
       infrastructure (dark fibre) and active infrastructure (traditional managed leased lines).

2 Geographic market definition

   71) The Parties submit  that  the  market  for  wholesale  leased  lines  is  national  in  scope  although  there  may  be  a  trend  towards
       internationalisation in the trunk segment.

   72) Respondents to the market investigation indicated that in Romania the market for wholesale leased lines  is  national  in  scope.  As  for
       Hungary, half of respondents including almost all customers considered the market to be national in scope, while a minority of respondents
       – mainly competitors - considered the market to be local in scope.[61]

73) The Commission previously held that the market is national in scope.[62]

   74) In light of the market investigation and its previous decision practice, the Commission concludes that the  market  for  wholesale  leased
       lines is national in scope in both Romania and Hungary.

2 The market for the wholesale provision of domestic call transit services on fixed networks

1 Product market definition

   75) In its previous decisional practice, the Commission considered that the wholesale provision of domestic call  transit  services  on  fixed
       networks comprises services used for carrying legacy-switched voice calls from the call origination service providers  to  the  respective
       call termination service provider where there is no direct connection between their respective originating and terminating networks.[63]

   76) The Parties submit that the market for call transit services on fixed networks is a legacy market  but  in  any  case  consider  that  the
       product market definition in this respect can be left open.

   77) In the present case, the exact definition of the product market can be  left  open,  as  the  proposed  transaction  does  not  raise  any
       competition concern under any plausible market definition.

2 Geographic market definition

   78) The Parties submit that the market for domestic call transit services on fixed networks is national in scope.

   79) The majority of respondents to the market investigation in Hungary confirmed that the market  is  national  in  scope.[64]  In  the  Czech
       Republic, the respondents to the market investigation have unanimously considered that the market is national.[65]

   80) Previous Commission decisions considered the market to be national in scope.[66] In the light of the market investigation and its previous
       decisional practice, the Commission considers, for the purposes of the present  decision,  that  the  market  for  domestic  call  transit
       services on fixed networks is national in scope.

3 The wholesale market for end-to-end calls

1 Product market definition

   81) Fixed network operators ("FNOs") package origination and termination services  and  provide  communication  providers  without  their  own
       networks a package which they can use to offer  retail  fixed  voice  services  to  consumers  without  the  need  to  invest  in  network
       infrastructure.

   82) The Commission considered the existence of a separate wholesale market for end-to-end calls, which is separate from the wholesale  markets
       for call origination, transit and termination, but left the exact market definition open.[67] In the same  decision,  respondents  to  the
       market investigation expressed the view that such a market would be an  intermediate  wholesale  market  downstream  from  wholesale  call
       origination, termination and domestic call transit markets and upstream from the market for retail voice services.

   83) The Parties agree with the Commission's previous decisional practice and further submit that such wholesale end-to-end calls services  can
       the provided through either self-supply by a single operator or merely resale of other operators' wholesale products.

   84) In the present case, the exact definition of the product market can be left open, notably whether  the  wholesale  market  for  end-to-end
       calls is a separate market from call origination and call termination and  transit,  as  the  proposed  transaction  does  not  raise  any
       competition concern under any possible market definition.

2 Geographic market definition

   85) In its past decision-making practice, the Commission concluded that this market is national.[68] The Parties agrees with such a geographic
       market definition.

   86) A large majority of the Hungarian customers of end-to-end calls responding to the market investigation indicated  that  they  source  such
       services on a national level.[69]

   87) Therefore, in light of the results of the market investigation and of its past decisional  practice,  the  Commission  considers  for  the
       purpose of the present decision that the geographic scope of the wholesale market for end-to-end calls services is national.

4 The markets for call termination services

1 Product market definitions

   88) Call termination services are provided when calls originate from one network and terminate on another network in order to allow  users  of
       different networks to communicate with one another. For such calls, the operator on which network the call terminates routes the call  and
       connects it to the called party. This service is therefore provided by the network operator of the called party on the supply side to  the
       network operator of the calling party on the demand side.

   89) In its decisional practice, the Commission defined a market for the wholesale provision of  fixed  call  termination  services[70]  and  a
       market for the wholesale provision of mobile call termination services.[71]

   90) In previous decisions, the Commission concluded that each individual network (both in fixed and in mobile network) constituted a  separate
       product market, as there is no substitute for call termination on each individual network since the network operator transmitting  a  call
       outgoing from its network to another network can reach the recipient only through the respective other network operator.[72]

   91) The Parties submit that the Commission's previous conclusions should be upheld.

2 Geographic market definitions

   92) In previous decisions, the Commission considered the markets (both fixed and mobile networks) to be national in scope.[73]

   93) The Parties submit that in the present case there is no need to decide on the exact definition of the product and  geographic  market,  as
       the proposed transaction does not raise any competitive concern under any possible product and geographic market definition.

   94) The market investigation does not provide any element that would substantiate a change in the geographic market definition.

   95) The Commission therefore concludes that the wholesale markets for fixed and mobile call termination services are national in scope.

5 The wholesale market for termination and hosting of non-geographic numbers

1 Product market definition

   96) The Commission has previously considered a market for termination and hosting of  non-geographic  numbers,  separate  from  the  wholesale
       market for fixed call termination services. These numbers are used to provide contact centres for government and businesses  that  provide
       value added services paid for through call charges. The Commission has left the precise market definition open.[74]

   97) The Parties agree with the Commission's precedents.

   98) The respondents to the market investigation in Poland[75] and in the Czech  Republic[76]  both  from  the  supply  and  demand  side  have
       indicated that fixed call termination services is a separate product market from termination and hosting of non-geographical numbers.

   99) The Commission considers that in any event, in the present case, the exact definition of the product market  can  be  left  open,  as  the
       proposed transaction does not raise any competitive concern under any possible product market definition.

2 Geographic market definition

  100) The Commission previously considered that there were indications that this market would be national in  scope,  but  ultimately  left  the
       market definition open.[77]

  101) The Parties submit that for the purpose of the competitive assessment it is not necessary to  conclude  on  the  exact  geographic  market
       definition.

  102) Respondents to the market investigation in Poland[78] and in the Czech Republic[79] expressed divergent views as to whether the market  is
       national or wider than national.

  103) The Commission considers that in any event, in the present case, the exact definition of the product market  can  be  left  open,  as  the
       proposed transaction does not raise any competitive concern under any possible product market definition.

6 The markets for call origination services

1 The wholesale market for call origination on the public telephone network at a fixed location

  104) In previous decisions, the Commission defined the relevant product market as the wholesale market  for  call  origination  on  the  public
       telephone network at a fixed location.[80] It consists of services for call conveyance from a fixed location on the network of the  Public
       Switched Telephone Network ("PSTN") of the calling  subscriber  through  the  infrastructure  of  the  same  undertaking  to  a  point  of
       interconnection where the call is transferred into the network of another undertaking for transit and/or termination.

  105) As for the geographic scope, in a previous decision the Commission considered the market to be national in scope.[81]

  106) The Parties agree with this decisional practice.

  107) The market investigation does not provide any element that would substantiate a change in the product or geographic market definitions.

  108) The Commission therefore concludes that for the purpose of the present decision the market should be defined as the  national  market  for
       call origination on the public telephone network at a fixed location.

2 The wholesale market for access and call origination services on mobile networks

  109) Network access and call origination are typically supplied together by a  Mobile  Network  Operator  ("MNO")  to  Mobile  Virtual  Network
       Operators ("MVNOs") and Service Providers who seek access to one or more of the MNO networks in order to provide their retail services  to
       end customers.

  110) In previous decisions, the Commission considered the wholesale access and call origination services by  MNOs  as  belonging  to  the  same
       market.[82]

  111) As for the geographic market definition, the Commission considered the market to be national in scope.

  112) The Parties concur with the Commission precedents.

  113)  The market investigation did not provide any indication that the product or geographic market definitions should be modified.

  114) The Commission considers that the market should be defined as the national  wholesale  market  for  mobile  access  and  call  origination
       services.

7 The markets for wholesale provision of broadband Internet access

1 Product market definition

  115) Wholesale broadband access includes different types of access that allow ISPs to provide services to end customers. ISPs that do  not  own
       local loop infrastructure may have several options to reach their retail customers including (i) physical access at a fixed location  such
       as unbundled access to the local loop (ULL); (ii) non-physical or virtual network access such as "bitstream" access at a  fixed  location;
       and (iii) resale of the fixed incumbent’s broadband offering.[83]

  116) From a regulatory point of view, the Commission defines distinct markets for LLU and  bitstream  (respectively  market  4  and  5  of  the
       Commission Recommendation 2007/879/EC[84])..

  117) The Parties do not concur with the Commission regulatory practice and submit that the markets for  wholesale  of  ULL  and  for  bitstream
       access show characteristics of an artificial market created by the regulatory regimes following the liberalisation of the  telecom  sector
       in Europe. Generally, only the national incumbent operator is  active  on  this  wholesale  market  as  a  supplier.  Infrastructure-based
       competition and hence "self-supply" would need to be taken into account. The Parties submit that in any event,  it  is  not  necessary  to
       conclude on the market definition.

  118) In the market investigation for the  Carphone  Warehouse/Tiscali  UK  decision,  the  Commission  found  significant  differences  in  the
       characteristics, price, performance and service between different types of wholesale broadband  access,  but  ultimately  left  the  exact
       market definition open.[85] As to this question, the market investigation was not conclusive in the present case.[86]

  119) The Commission considers that in any event, in the present case, the exact definition of the product market  can  be  left  open,  as  the
       proposed transaction does not raise any competitive concern under any possible product market definition, namely because the two  possible
       sub-segments – ULL and bistream access – are regulated and there are  alternative  providers  that  will  continue  to  exert  competitive
       pressure post-transaction.

   2 Geographic market definition

  120) In previous decisions, the Commission considered that there are several arguments to support a nation-wide geographic market definition in
       relation to the market for wholesale broadband Internet access, but eventually left the market definition open.[87]  The  Parties  do  not
       contest the Commission's previous decisional practice.

  121) Respondents to the market investigation indicated that the market for wholesale broadband offering is national in scope.[88]

  122) In light of the above, the competitive assessment of the proposed transaction will be based on the market for wholesale broadband Internet
       access and its sub-segments in Hungary.

       COMPETITIVE ASSESSMENT

  123) The proposed transaction gives rise to a large number of horizontally or vertically affected markets in Hungary, Romania, Poland  and  the
       Czech Republic, which will be discussed in the following sections.[89]

1 Hungary

1 Parties' activities

  124) In Hungary, GTS CE focuses on providing services to business customers. In particular, at the  retail  level,  GTS  CE  provides  business
       customers with fixed line telecommunications services such as internet connectivity, data and voice  services,  including  VPN  and  cloud
       services. At the wholesale level, GTS CE mainly provides data and voice services to other carriers, such as global communication carriers,
       regional carriers, resellers, mobile operators, ISPs, cable operators and hosting providers.  GTS  CE  does  not  offer  its  services  to
       residential customers. Hungary accounts for [5-10]% of GTS CE's turnover.

  125) In Hungary, DT is active through Magyar Telekom ("MT"), one of the major local fixed and mobile network operators. Along with its local T-
       Home, T-Systems and T-Mobile brands, DT is active in fixed line telephony, broadband internet, mobile voice and data,  IPTV[90]  products,
       as well as network-centric information and communications technology  ("ICT")  services  for  business  customers.  Business  connectivity
       services amount to approximately [5-10]% of DT's turnover.

2 Horizontally affected markets

  126) The proposed transaction gives rise to five horizontally affected markets: wholesale leased lines, wholesale provision  of  domestic  call
       transit services, retail business connectivity, retail supply of fixed internet access services and retail supply of fixed voice services.

1 Market for wholesale leased lines

  127) The Parties estimate the size of the market to be EUR 21.7 million in 2012.

  128) In Hungary, DT and GTS CE offer wholesale leased lines in the terminating segment (used for customer access and backhaul) and in the trunk
       segment (used for backbone transmission). The Parties' market shares are summarised in the table below.

Table - Market for wholesale leased lines
|Main Market[91]                                                           |Possible sub-segments[92]                                           |
|                                                                          |Trunk segment                                                       |
|Value:                            |Volume:                                |Value:                                                              |
|DT: [30-40] %                     |DT: [30-40]%                           |DT: [30-40]%                                                        |
|GTS CE: [10-20]%                  |GTS CE: [10-20]%                       |GTS CE: [5-10]%                                                     |
|Combined: [40-50]%[93]            |Combined: [40-50]%                     |Combined: [40-50]%                                                  |
|                                  |                                       |Terminating segment                                                 |
|                                  |                                       |Value:                                                              |
|                                  |                                       |DT: [30-40]%                                                        |
|                                  |                                       |GTS CE: [10-20]%                                                    |
|                                  |                                       |Combined: [40-50] %                                                 |
|                                  |                                       |Terminating segment of leased lines with bandwidth above 2 Mbps     |
|                                  |                                       |Value:                                                              |
|                                  |                                       |DT: [30-40]%                                                        |
|                                  |                                       |GTS CE: [10-20]%                                                    |
|                                  |                                       |Combined: [50-60] %                                                 |
|                                  |                                       |Terminating segment of leased lines with bandwidth below 2 Mbps     |
|                                  |                                       |Value:                                                              |
|                                  |                                       |DT: [30-40]%                                                        |
|                                  |                                       |GTS CE: [5-10]%                                                     |
|                                  |                                       |Combined: [40-50]%                                                  |

                                                      Source: Parties' best estimate (2012)

1 Parties’ view

       The Parties submit that in a market for wholesale leased lines, irrespective of any possible sub-segmentation,  the  proposed  transaction
       does not lead to any competition concerns, as the market is characterised by intense infrastructure based competition. First, they  submit
       that the investment required for both the access and  the  core  network  does  not  entail  significant  sunk  costs  since  (i)  passive
       infrastructure at competitive prices is largely available and (ii) any entrant could lease parts of the access  network  of  the  Parties'
       competitors. In addition, barriers to entry have been lowered by the development of more cost efficient alternatives such  as  IP  VPN  or
       Ethernet, which are in the process of replacing traditional leased lines. As an example of recent successful  entry  the  Parties  mention
       Business Telecom PLC[94] Second, the Parties submit that they face strong competition from several providers such as  Invitel  ([30-40]%),
       UPC Hungary ([5-10]%), MVMNet - NISZ ([5-10]%) and Antenna Hungária[95] ([0-5]%).[96]

  129) According to the Parties, the merger would not change the competitive landscape as regards the market for wholesale leased lines. Although
       DT has an extensive network[97], the Target has limited network presence in Hungary, mostly concentrated  in  metropolitan  areas.[98]  In
       addition, the Target relies mostly on leased infrastructure from third parties.[99] The overlaps in the Parties' networks relate to the 12
       largest cities[100] in Hungary as well as to […] access points in five other cities[101],  where  at  least  five  other  competitors  are
       present.

  130) As regards trunk segment services, the Parties claim that this segment is marginal for the Parties' business and  that  in  any  case  the
       overlap between the Parties' activities is minimal, as GTS CE focuses mainly on the terminating segment.[102]

  131) As regards terminating segment services, the Parties submit that Hungarian cable operators' hybrid fibre  coaxial  networks  have  similar
       topology to legacy copper access networks and thus are able to provide wholesale leased lines  terminating  services.  Furthermore,  fixed
       radio access and dark fibre, which allow operators to provide wholesale leased lines terminating segment services, are easily available to
       nearly every operator. In addition, they refer to previous decisional practice of NMHH (the Hungarian regulator)  that  acknowledged  that
       the market and its possible sub-segments were competitive.[103]

2 Results of the market investigation

  132) First, responses to the market investigation indicated that in the market for wholesale leased lines, barriers to entry are  high  due  to
       the need of an appropriate infrastructure and the high investments required to  build  or  develop  it,  irrespective  of  any  additional
       segmentation of the market.[104] Moreover, a majority of respondents stated that the emergence of alternative technologies such as VPN and
       Ethernet have not lowered barriers to entry.[105] Respondents to the market investigation took  diverging  views  as  to  whether  VPN  or
       Ethernet are replacing physical leased lines.[106]

  133) Second, the market investigation indicated that the Parties are not each other's  closest  competitors,  irrespective  of  any  additional
       segmentation of the market. A majority of competitors who replied to the market investigation  stated  that  DT's  closest  competitor  is
       Invitel, followed by MVMNet-NISZ, whereas GTS CE's closest competitor is also Invitel,  followed  by  Antenna  Hungária  and  DT.[107]  In
       addition, a majority of competitors considered DT to be an innovative player in the market,  whereas  GTS  CE  is  perceived  as  a  minor
       operator.[108]

  134) Third, as regards the way in which wholesale leased lines contracts are awarded, the market investigation  showed  that  customers  multi-
       source, in order to ensure access to supplies in different parts of the country, as suppliers have a different network coverage.[109]

3 Commission's assessment

  135) The Commission considers that the proposed transaction does not result in competition concerns on the market for wholesale leased lines in
       Hungary.

  136) First, post-transaction, significant other competitors such as Invitel, MVMNet  and  Antenna  Hungária  remain  in  the  market  and  will
       sufficiently constrain the merged entity. In particular, the Parties' networks  overlap  in  urban  areas[110]  where  there  are  several
       parallel infrastructures. In particular, infrastructure-based competition is strong in Budapest, where  approximately  80%  of  the  total
       market revenues are concentrated.[111] In the twelve largest  cities  where  the  Parties'  networks  overlap[112]  at  least  five  other
       competitors provide wholesale leased lines services. Among these competitors, Invitel, MVMNet, Antenna Hungária are present in all  twelve
       cities, while Digi is present in eleven cities and UPC in nine cities. Invitel, MVMNet, Antenna Hungária and UPC operate an infrastructure
       of national scope and are able to offer comparable services in terms of quality as those offered by the Parties. In  addition,  there  are
       local competitors that  are  present  in  certain  urban  areas.[113]   The  market  investigation  has  largely  confirmed  the  Parties'
       representation.

  137) Second, the market investigation confirmed that the Parties are not close competitors  to  each  other  on  that  market.  Therefore,  the
       proposed transaction will not eliminate an important competitive constraint on DT.

  138) As regards the trunk segment of leased lines, the Parties will continue to face competition from Invitel,  MVMNet,  Antenna  Hungária  and
       Turk Telekom International. The competitive landscape of this market is confirmed by the decisional practise of the NMHH. In its  analysis
       of 2007, NMHH considered that "several other players have  constructed  significant  capacities  in  the  geographic  segments  which  are
       important for leased line trunk segment service which hinders this operator [MT] in offering external  customers  much  worse  contractual
       conditions (primarily prices) than the other wholesale operators."[114]

  139) As regards the terminating segment of leased lines, there  are  several  access  connection  technologies  available  from  a  variety  of
       competitors. Hungarian cable operators' hybrid fibre coaxial cable networks have a similar topology  to  legacy  copper  access  networks.
       Among others, UPC is currently providing this service. Fixed radio access and dark fibre are also access network services.

  140) With regard to the sub-segment of termination services for  leased  lines  with  bandwidth  below  2  Mbps,  several  competitors  provide
       termination services and will constrain the merged entity.[115] With respect to the terminating segment of  leased  lines  above  2  Mbps,
       Invitel, MVMNet-NISZ, Antenna Hungária and UPC compete and will continue to compete post transaction against the merged entity in addition
       to local niche players.[116]

  141) As regards the possible segment of the supply of dark fibre, the Parties do not hold a  significant  position  in  the  market,  as  their
       combined market share amounts to [10-20]%. In addition, there are several operators (at least 25) providing dark fibre in  Hungary.  Among
       them, Invitel and MVMNet offer national coverage, while others operators are specialised in regional urban[117] and  rural[118]  areas  of
       the country. Currently, GTS CE itself leases passive infrastructure from 20 of these operators.

  142) In addition, the Parties' combined market share in a market for wholesale leased lines excluding dark fibre would not change significantly
       and therefore the considerations in relation to the broader market for wholesale leased lines  (paragraphs  (135)  to  (137)  above)  hold
       true.[119]

  143) Considering all of the above and the other available evidence, post-transaction, the merged entity will face competitive constraints  from
       significant competitors on the market for wholesale leased lines and its possible  sub-segments,  which  are  able  to  offer  nation-wide
       coverage and quality services to customers. Therefore, the Commission concludes that the Transaction does not raise serious doubts  as  to
       its compatibility with the internal market on the wholesale market for leased lines and any of its possible sub-segments in Hungary.

2 Market for the wholesale domestic call transit on fixed networks

  144) The Parties estimate the size of the market to be EUR 9,7 million in 2012. This market has been  declining  for  some  years  and  is  now
       stagnating.

  145) In Hungary, both DT and GTS CE offer wholesale domestic call transit services to providers of telephony services, which do not have direct
       interconnection agreements with other carriers' network in order to terminate their voice calls. In this market, in 2012 DT had  a  market
       share of [20-30]% and GTS CE [20-30]% (combined market share of [40-50]%) in value and DT [20-30]% and GTS CE  [10-20]%  (combined  market
       share of [40-50]%) in volume (number of minutes).

1 Parties’ view

  146) The Parties submit that the proposed transaction will not impede effective competition on the wholesale market for domestic  call  transit
       in Hungary for the following reasons.

  147) First, the activities of DT and GTS have different business focuses and, therefore, they are not close competitors. More precisely, GTS CE
       serves small voice carriers with limited or even without own network infrastructure that, due to their limited demand, find it  convenient
       to procure transit services via an intermediary. Second, the Parties submit that  the  Hungarian  market  for  domestic  call  transit  is
       sufficiently competitive because of the presence of alternative providers such as UPC, Invitel, Netfone or BT. Third, given the regulatory
       framework of the wholesale market for call termination[120], the need  for  call  transit  could  be  substituted  partially  with  direct
       interconnections with other carriers' networks. Operators that provide wholesale call termination services on fixed  networks  in  Hungary
       are under the obligation, among others, to grant access and interconnection to their  networks  to  other  operators.  This  would  imply,
       according to the Parties, that no market power could be exercised on the market for call transit services because competing operators  can
       avoid transit services by directly interconnecting with terminating networks at any geographic level.

2 Results of the market investigation

  148) A majority of respondents to the market investigation indicated that the Parties  are  not  close  competitors.[121]  Clients  of  transit
       services also confirmed the Parties' argument that GTS CE would have a clear focus on smaller customers.[122]

3 Commission's assessment

  149) The Commission considers that the proposed transaction does not result in competitive concerns on  the  market  for  transit  services  in
       Hungary.

  150) First, post-merger, alternative providers of domestic call transit services will remain active on this market and will continue  to  exert
       competitive pressure on the merged entity. These companies include UPC (market share of [10-20]%), Invitel ([0-5]%)  and  Netfone  Telecom
       ([0-5]%).

  151) Second, the transaction does not remove a close competitor of DT.

  152) Third, given the access and interconnection obligations contained in the regulatory framework of the wholesale market for call termination
       services on fixed networks, operators are also able to connect directly to other carrier's networks.

  153) Considering all the above, the Commission concludes that the proposed transaction does not raise serious doubts as  to  its  compatibility
       with the internal market on the wholesale market for domestic call transit in Hungary.

3 Market for retail business connectivity

  154) The Parties estimate the size of the market to be EUR 117,4 million in 2012.

  155) In Hungary, both DT and GTS CE are active in the retail provision of business connectivity services to large corporate and  public  sector
       customers. Respective market shares of the Parties can be found in the table below.

       Table - Market for retail business connectivity in Hungary

|Main Market                                                              |Possible sub-segments                                                 |
|Retail market for business connectivity                                  |Broadband access                                                      |
|                                                                         |Value:                           |Volume:                             |
|                                                                         |DT: [30-40]%                     |DT: [30-40]%                        |
|                                                                         |GTS: [5-10]%                     |GTS: [0-5]%                         |
|                                                                         |Combined:  [40-50]%              |Combined: [30-40]%                  |
|                                                                         |Leased lines                                                          |
|Value:                               |Volume:                            |Value:                           |Volume:                             |
|DT: [40-50]%                         |DT: [20-30]%                       |DT: [40-50]%                     |DT: [20-30]%                        |
|GTS: [0-5]%                          |GTS: [0-5]%                        |GTS: [5-10]%                     |GTS: [10-20]%                       |
|Combined: [40-50]%                   |Combined: [20-30]%                 |Combined: [50-60]%               |Combined: [30-40]%                  |
|                                     |                                   |VPN                                                                   |
|                                     |                                   |Value:                           |Volume:                             |
|                                     |                                   |DT: [30-40]%                     |DT: [5-10]%                         |
|                                     |                                   |GTS: [0-5]%                      |GTS: [0-5]%                         |
|                                     |                                   |Combined: [30-40]%               |Combined: [10-20]%                  |

                                                      Source: Parties' best estimate (2012)

1 Parties’ view

  156) First, the Parties submit that the merged entity will continue to face strong competition. Decreasing market shares of the Parties in  the
       last three years would further support this statement. Second, the Parties submit that barriers to entry are  low,  especially  given  the
       increasing demand of VPN services that require limited infrastructure.[123] Lastly, they consider  that  DT  and  GTS  CE  are  not  close
       competitors.

2 Results of the market investigation

  157) First, the majority of competitors responding to the market considered that barriers to entry were high on the retail market for  business
       connectivity and on the possible sub-segment for leased lines, given the need for the appropriate infrastructure and of the requisite know-
       how.[124] Competitors expressed diverging views as to whether barriers to entry  were  low  on  the  possible  sub-segments  of  broadband
       connectivity and VPN services. However, competitors responding to the market  investigation  generally  confirmed  that  standardized  and
       regulated wholesale products allow an easy entry into those segments/ markets.[125]

  158) Second, a large majority of customers responding to the market investigation indicated that both GTS CE and its competitor  Invitel  could
       be considered as close competitors of DT on this market.[126]

3 Commission's assessment

  159) First, post-transaction, the merged-entity will continue to face strong competitive pressure from  Invitel  (market  share  of  [20-30]%).
       Moreover, smaller players (UPC: [5-10]%, NISZ: [0-5]%, Antenna Hungaria: [0-5]%) will remain active  on  this  market  and  constrain  the
       merged entity. Likewise, such competitors will be active on each of the possible sub-segments.

  160) Second, given that GTS CE's presence on this market is limited, the increment is relatively small ([0-5]% by value in  the  retail  market
       for business connectivity and all other sub-segments except in the sub-segment for broadband access where it is  [5-10]%).  Likewise,  the
       combined market share of the Parties based on volume remains [30-40]% and GTS CE's share of the  number  of  lines  is  [0-5]%,  with  the
       exception of the sub-segment for leased lines ([10-20]%), where the Parties' combined market share by volume is still [30-40]%.

  161) Third, with respect to barriers of entry into the market, the Commission considers that, as  regards  the  sub-segment  of  leased  lines,
       despite the fact that duplication of infrastructure can prove costly and time-consuming,  entry  into  this  sub-segment/  market  may  be
       facilitated by the high availability of wholesale inputs.[127]

  162) Considering all the above and the other available evidence, the Commission concludes that the Transaction does not raise serious doubts as
       to its compatibility with the internal market on the retail markets for business connectivity and any of  its  possible  sub-segments,  in
       Hungary.

4 Market for the retail supply of fixed voice services

  163) The Parties estimate the size of the market to be EUR 317,5 million in 2012.

  164) In Hungary, both DT and GTS CE are active on the retail market for the provision of fixed voice services.  On  this  market,  DT  provides
       fixed line telephony services as a stand-alone product through its subsidiary DT, the former incumbent.

  165) DT has a 2012 market share of [50-60]% in value and [40-50]% in volume. GTS CE provides fixed voice as  a  complementary  service  to  its
       offer and its presence on this market is limited to [0-5]% of the total market in value and [0-5]% in volume. The combined market share of
       the Parties is [50-60]% in value and [40-50]% in volume.

1 Parties’ view

  166) The Parties submit that the proposed transaction will not significantly impede effective competition on  this  market  for  the  following
       reasons. First, GTS CE's activities in Hungary are insignificant (market share [0-5]% both in  value  and  volume),  irrespective  of  the
       market definition. Second, the legacy voice market is in decline due to the advent of VoIP solutions. Third, the  neighbouring  market  of
       mobile telecommunications services exerts competitive pressure on the fixed voice market.

2 The Commission's assessment

  167) The Commission considers that the proposed transaction will not result in any competition concern on this market. First, no respondent  to
       the market investigation raised any concern related to the impact of the proposed transaction on the market for the retail supply of fixed
       voice services in Hungary.

  168) Second, the increment brought about by the transaction is negligible as GTS CE is a very small player.

  169) Third, despite a combined market share of the Parties exceeding 50% in this market ([50-60]% in  value  and  [40-50]%  in  volume),  post-
       transaction, the Parties will continue to face competition from significant competitors such as Invitel ([10-20]%), UPC ([5-10]%) and Digi
       Telecommunications ([0-5]%).

  170) Fourth, DT's activities in the market for the retail supply of fixed voice services are subject to a  regulatory  framework  that  imposes
       limitation on price increases according to the consumer price index and prohibition of undue discrimination of subscribers.[128]

  171) Considering all the above and the other available evidence, the Commission concludes that the proposed transaction does not raise  serious
       doubts as to its compatibility with the internal market on the market for the retail supply of fixed voice services in Hungary.

5 Market for the retail supply of fixed internet access

  172) The Parties estimate the size of the market to be EUR 478 million in 2012.

  173) In Hungary, both DT and GTS CE are active on the retail market for the provision of retail  supply  of  fixed  internet  access.  On  this
       market, DT provides fixed broadband access through its subsidiary DT, the former incumbent.

  174) DT has a 2012 market share of [20-30]% in value and [30-40]% in volume. GTS CE provides its services mainly to business customers and,  to
       a limited extent, to residential end-users. GTS CE's presence on this market is limited to [0-5]% of the total market both in value and in
       volume. The combined market share of the Parties is [20-30]% in value and [30-40]% in volume.[129]

1 Parties' view

  175) The Parties submit that the proposed transaction will not significantly impede effective competition on  this  market  as  GTS  CE  has  a
       limited market presence and strong competitors exist.

2 Commission's assessment

  176) The Commission considers that the proposed transaction will not result in any competition concern on this market. First, no respondent  to
       the market investigation raised any concern related to the impact of the proposed transaction on the market for the retail supply of fixed
       internet access in Hungary. Second, the increment brought about by the transaction is negligible as GTS CE is a very small player  with  a
       market share [0-5]%.

  177) Second, post-Transaction, the Parties will still face competition from significant players such as UPC ([20-30]%), Invitel ([10-20]%)  and
       Digi Telecommunications ([5-10]%).

  178) Considering all the above and the other available evidence, the Commission concludes that the proposed transaction does not raise  serious
       doubts as to its compatibility with the internal market on the market for the retail supply of fixed internet access in Hungary.

3 Vertically affected markets

1 Wholesale leased lines – Retail business connectivity

  179) In Hungary, the proposed transaction leads to a vertical overlap between the Parties' activities in  the  upstream  wholesale  market  for
       leased lines and the downstream market for retail business connectivity. The Parties' shares  on  these  markets  and  its  possible  sub-
       segments can be found in Table 1 and 2 in sections 5.1.2.1 and 5.1.2.3 respectively.

  180) From a technical point of view, leased lines at wholesale level are a necessary input for the provision of  retail  business  connectivity
       services. However, a distinction has to be made according to the possible sub-segment of retail business connectivity. On  the  one  hand,
       when providing leased lines at retail level, competing providers can either source wholesale leased lines  or  self-supply  them.  On  the
       other hand, the retail provision of VPN services and fixed broadband access to  large  business  customers  can  be  carried  out  through
       alternative solutions, namely wholesale leased lines or self-supply but also via  wholesale  broadband  access  products  coupled  with  a
       proprietary or leased backbone network.

1 Parties’ view

  181) As regards possible input foreclosure, that is the possibility that the merged entity could  stop  providing  wholesale  leased  lines  to
       competing providers of retail business connectivity, the Parties submit that they will not have the ability nor the incentive to engage in
       such a strategy.

  182) As for ability, the Parties submit that the upstream wholesale market for leased lines is  characterised  by  strong  infrastructure-based
       competition on the broad market for leased lines but also on each of the possible sub-segments for (i) trunk  segments,  (ii)  terminating
       segments and (iii) terminating segments with bandwidth above 2 Mbps. As regards (iv) the possible sub-segment for terminating segments  of
       leased lines with bandwidth below 2 Mbps, the Parties claim that any foreclosure effect can  be  ruled  out  from  the  outset  given  the
       regulatory obligations imposed by the Hungarian telecommunication regulator NMHH (transparency, equal  treatment,  accounting  separation,
       access and interconnection obligations).[130]

  183) As for incentives to engage in such a foreclosure strategy, the Parties submit that the merged entity would not be able  to  benefit  from
       such a strategy. Post-transaction, competing retailers of business connectivity will be able either to source wholesale leased lines  from
       competing providers (Invitel, UPC, MVMNet, Antenna Hungaria) or to rely on substitute offers  (fixed  radio  access,  ULL  or  Bitstream).
       Finally, the Parties stress the declining importance of physical leased lines in light of the emergence of cheaper "virtual" leased  lines
       (IP-VPN or Ethernet).

  184) As regards customer foreclosure, that is the possibility that the merged  entity  as  a  retailer  of  business  connectivity  could  stop
       procuring wholesale leased lines from competing providers, the Parties submit that they will not have the ability (nor the  incentive)  to
       engage in such a strategy. GTS CE's market share upstream  would  be  minor  and,  as  a  consequence,  competing  retailers  of  business
       connectivity will be able, post-transaction, to supply leased lines at wholesale level to competing retailers.

2 Results of the market investigation

  185) First, the majority of customers responding to the market investigation considered wholesale leased lines as a critical input.[131]

  186) Second, a large majority of respondents confirmed the existence of alternative providers upstream.[132]

  187) Third, some respondents to the market investigation complained about the impact of the proposed transaction in certain  geographic  areas.
       In their view, the merged entity would be the only provider of leased lines in certain regions, thus rendering it possible for it to exert
       market power.

3 Commission's assessment

  188) The Commission considers that the merged entity will not have the ability to engage in an input foreclosure  scenario  for  the  following
       reasons.

  189) With regard to the possible sub-segments for the (i) retail provision of VPN services and (ii) fixed broadband access  to  large  business
       customers and their potential vertical overlap with terminating segments of leased lines (both with bandwidth above  and  below  2  Mbps),
       competing providers downstream will be able, post-transaction to source wholesale leased lines from alternative providers such as Invitel,
       UPC, MVMNet or Antenna Hungaria. Moreover, for the purpose of providing such retail services, terminating segments of leased lines can  be
       substituted by wholesale access solutions over copper or hybrid infrastructures.[133] As explained in paragraph  (180),  wholesale  access
       solutions such as ULL and Bitstream are available to potential access seekers given the  regulatory  obligations  imposed  on  SMP  market
       players.[134] As a result, there will be alternative inputs to the wholesale  terminating  segments  of  leased  lines  for  retailers  of
       business connectivity.

  190) As regards the possible sub-segments for the (i) retail provision of VPN services and  (ii)  fixed  broadband  access  to  large  business
       customers and their potential vertical overlap with trunk segments of leased lines, the market investigation confirmed (as pointed out  in
       paragraph (186) above) that alternative providers of leased lines (notably Invitel, MVMNet,  Antenna  Hungaria)  will  continue  to  exert
       competitive pressure on the merged entity post-transaction. Moreover,  as  suggested  by  NMHH[135]  "since  several  other  players  have
       constructed significant capacities in the geographic segments which are important for the leased line trunk  segment,  they  are  a  valid
       alternative to customers and can prevent any operator from offering much worse contractual conditions than the other wholesale operators".
       Finally, GTS CE's presence on this upstream market is limited ([5-10]%).

  191) The findings in paragraphs (189) and (190) above equally apply to the vertical overlap between both (i) the broader downstream market  for
       retail business connectivity and (ii) the possible sub-segment for the retail supply of leased lines, on the one hand,  and  the  upstream
       market for the wholesale provision of trunk segments of leased lines, on the other hand.

  192) As regards (i) the broader market for retail business connectivity and (ii) the possible sub-segment  for  the  retail  supply  of  leased
       lines, on the one hand, and their potential vertical overlap with the upstream market for the wholesale provision of terminating  segments
       of leased lines (both with bandwidth above and below 2 Mbps), the market investigation confirmed (as pointed out in paragraph  (189)  that
       alternative providers of leased lines (notably UPC, Invitel, MVMNet, Antenna Hungaria) will continue to exert competitive pressure on  the
       merged entity post-transaction.

  193) As to the claim that the merged entity would be the only provider of leased lines, the Commission considers the following. First  of  all,
       the existence of remote areas where only DT would be active would not be merger specific and, therefore, will not be analysed further.

  194) Second, the Commission investigated whether in all relevant geographic areas where the Parties' leased lines networks overlap, alternative
       providers will be able to offer competing services post-transaction.

  195) The Parties confirmed that alternative providers will be present in all the cities where DT’s and GTS CE’s networks overlap, namely the 12
       major Hungarian cities of Budapest, Debrecen, Miskolc, Szeged, Pécs, Győr, Nyíregyháza, Kecskemét, Székesfehérvár,  Szombathely,  Szolnok,
       Tatabánya as well as the secondary cities of Zalaegerszeg, Budaörs,  Sopron,  Bicske,  Dombóvár.  The  market  investigation  has  largely
       confirmed the Parties' representation.

  196) Third, the Commission considers that the merged entity would have no ability to engage in any input foreclosure because some of  its  main
       competitors are already vertically integrated. In particular, the market investigation has revealed  that  major  competing  providers  of
       retail business connectivity such as Invitel or UPC are not dependant on DT's or GTS CE's offer of wholesale leased lines but rather self-
       supply such input and, thus, would not be foreclosed post-transaction.

  197) Finally, considering the possible upstream sub-segment of dark fibres (with market shares of DT:[10-20]% and GTS CE: [0-5]%),  the  merged
       entity will not be able to engage in any input foreclosure since, given its limited presence upstream and  the  existence  of  alternative
       national competitors such as Invitel and MVMNet and regional ones, such as UPC, Antenna Hungária and Trafficon, this  strategy  would  not
       prove profitable.

  198) As regards a possible customer foreclosure scenario, the Commission considers that the merged entity will not have the ability  to  engage
       in such a strategy. As explained in Section 5.1.2.3 above, the merged entity will not have the ability to foreclose competing providers of
       wholesale leased lines because, given its relative market presence ([30-40]% in volume) it does  not  constitute  an  avoidable  customer.
       Indeed, several other retailers of business connectivity (as well as MNOs, see section 5.1.3.2 below) will be active, post-transaction, on
       this market such as Invitel, UPC Hungary or NISZ (market share of [20-30]%, [5-10]% and [0-5]% respectively).

  199) Finally, considering the possible upstream sub-segment of dark fibres, (with market shares of DT: [10-20]% and GTS CE: [0-5]%), the merged
       entity will not be able to engage in any customer foreclosure since, given its limited presence upstream and the existence of  alternative
       competitors (Invitel [40-50]%, MVMNet [10-20]%, Nokia-Siemens-Trafficom [10-20]%), this strategy would not prove profitable.

  200) Considering all the above and the other available evidence, the Commission concludes that the proposed transaction does not raise  serious
       doubts as to its compatibility with the internal market on the vertically affected markets for wholesale leased lines and retail supply of
       business connectivity in Hungary.

       2 Wholesale leased lines – retail mobile telecommunication services to end customers

  201) In Hungary, the Parties activities lead to a vertical relationship between  the  upstream  market  for  wholesale  leased  lines  and  the
       downstream market for retail supply of telecommunication services.

  202) In the 2012 upstream market of wholesale leased lines the combined market shares of the Parties amount to [40-50]% by value (DT: [30-40]%;
       GTS CE: [10-20]%), while in the downstream market for retail supply of mobile telecommunication services  to  end  consumers  only  DT  is
       present with market share of [40-50]% by value and of [40-50]% by volume (subscribers).

  203) In the downstream market for retail telecommunication services, DT's main competitors are Telenor and Vodafone with market shares by value
       of approximately [30-40]% and [20-30]% respectively.

       1 Parties’ view

  204) The Parties submit that this vertical relationship will not lead to any competition concerns, as the  merged  entity  will  not  have  the
       ability or the incentive to engage in any foreclosure scenario.

  205) The Parties submit that the merged entity would not have the ability to foreclose access to  wholesale  leased  lines  for  the  following
       reasons.

  206) First, the Parties could not exert significant market power on the upstream market for wholesale leased lines, which is  characterised  by
       infrastructure-based competition and where strong competitors such as Invitel, UPC, MVMNet  and  Antenna  Hungária  represent  alternative
       suppliers for downstream retailers of mobile telecommunication services.

  207) Second, wholesale leased lines are not an essential input in order to provide retail mobile telecommunication services  and  in  any  case
       they do not represent an important cost factor of the overall costs  of  providing  retail  mobile  telecommunication  services.  In  that
       respect, the Parties submit that mobile network operators ("MNOs") purchase to a negligible extent wholesale leased lines  above  2  Mbps,
       dark fibre or Ethernet connectivity to supply retail mobile service.

  208) Third, retailers of mobile telecommunication services do not rely on DT for the supply of wholesale leased lines.

  209) Fourth, retailers of mobile telecommunication services can provide their services through alternative input  services  such  as  wholesale
       call transit on fixed network services, provided by UPC and Invitel. In addition, leased lines  will  be  progressively  replaced  by  new
       generation microwave technologies and will not play a major role for the provision of retail telecommunications services.

  210) Finally, the merged entity will not have the ability nor the incentive to engage in a  customer  foreclosure  strategy,  given  the  large
       number of (potential) wholesale leased lines customers, both in mobile and fixed telecommunication services and the fact that  competitors
       in the downstream market for retail supply of telecommunication services currently source from third parties.

2 Results of the market investigation

  211) Retailers of mobile telecommunication services responding to the market investigation source from more than one supplier wholesale  leased
       lines.[136] In that respect, according to a respondent to the market investigation, it is essential to have several suppliers in order  to
       ensure geographic coverage across the country.[137]

  212) Respondents to the market investigation indicated that wholesale leased lines and in particular dark fibre are an essential input in order
       to provide retail mobile telecommunication services.[138] However, one respondent pointed out that the supply of  wholesale  leased  lines
       (including dark fibre) represents a marginal cost of the overall costs for the provision of retail mobile telecommunication services.[139]
       In addition, retailers of mobile telecommunication services responding to the market investigation own a mobile network that covers almost
       all the national territory.[140]

  213) Retailers of mobile telecommunication services responding to the market investigation confirmed that  an  alternative  to  the  supply  of
       wholesale leased lines is the building  of  own  transmission  network  using  microwave  technology  for  access,  although  it  is  more
       expensive.[141] One respondent to the market investigation indicated that the new microwave technology could not,  however,  replace  dark
       fibre, which is more suited for the high capacities required in the core and backhaul and increasingly in the access  termination  network
       due to the advent of 4G technology.[142]

  214) Retailers of mobile telecommunication services responding to the market investigation took diverging views as to whether they rely on  the
       parties for their supply of wholesale leased lines.[143]

  215) As regards the presence of alternative suppliers post transaction, a retailer of telecommunication services expressed some  concerns  with
       reference to the fact that in some rural areas of the country, where only DT is present, they could be foreclosed or discriminated against
       in access to leased lines, namely to dark fibre.[144] However, it also pointed out that these remote regions account for an  insignificant
       part of the national territory.[145]

3 Commission's assessment

  216) The Commission considers that the merged entity will not have the ability to engage in any foreclosure scenario for the following reasons.

  217) As for an input foreclosure scenario, the merged entity will not have the incentive to engage in such  a  strategy  since,  as  stated  in
       paragraph (136) above, the upstream market for wholesale leased lines is characterised by the presence of strong  competitors.  Therefore,
       customers of wholesale leased lines, regardless of any possible sub-segmentation of the market,  will  be  able  to  source  from  several
       alternative suppliers.

  218) Retailers of mobile telecommunication services may source from the Parties' main upstream competitors (Invitel, MVMNet,  Antenna  Hungária
       and UPC) wholesale leased lines and any possible sub-market, namely passive (dark fibre) and active infrastructure (managed leased lines),
       trunk and terminating segment as well as terminating segment of leased lines with bandwidth above and below 2 Mbps.  In  addition  to  the
       main competitors offering a national infrastructure, retailers of mobile telecommunication may also source from  several  local  operators
       present in urban areas and rural regions of the country, as indicated in paragraph (136) above.

  219) As to the claim that the merged entity would be the only provider of leased lines and in particular dark fibre in certain remote areas  of
       the country, the Commission considers the following. As stated in paragraph (136) above, the Parties' networks  overlap  in  urban  areas,
       where several alternative suppliers are present and constrain the Parties. By consequence, the existence of remote rural areas where  only
       DT would be active would not be merger specific and, therefore, will not be analysed further.

  220) Moreover, the Parties' combined market share in a hypothetical market for the supply of dark fibre are not  significant[146]  and  in  the
       areas where the Parties' networks overlap retailers of mobile telecommunication services can find alternative suppliers to  satisfy  their
       needs. As stated in paragraph (141) above, there are at least 25 operators providing dark fibre across the country.

  221) In addition, possibly apart from remote areas where only DT is present, both retailers  of  mobile  telecommunication  services  indicated
       that, if the merged entity stopped providing wholesale leased lines to third  parties  retailers  of  mobile  telecommunication  services,
       switching would be costly but still possible.[147]

  222) Finally, both retailers of mobile telecommunication services responding to the market investigation  considered  that  the  merged  entity
       would not have the incentive to engage in an input foreclosure scenario because the costs of stopping providing wholesale leased lines  in
       the upstream market would not be off-set by increased profits in the downstream market of retail mobile telecommunication services.[148]

  223) As regards a possible customer foreclosure scenario, the Commission considers that the merged entity will not have the ability  to  engage
       in such a strategy, since post transaction upstream competitors could provide wholesale leased lines services to several other  customers,
       active in the downstream markets for retail supply of mobile telecommunication services (such as Telenor and Vodafone) or retail  business
       connectivity services (such as Invitel, UPC Hungary or NISZ, see section 5.1.3.2 above).

  224) Considering all the above and the other available evidence, the Commission concludes that the proposed transaction does not raise  serious
       doubts as to its compatibility with the internal market with respect to the vertical  relationship  between  the  wholesale  leased  lines
       market and the market for supply of mobile telecommunication services in Hungary.

       3 Wholesale provision of domestic call transit services on fixed network – retail supply of fixed voice services and retail supply of
       mobile telecommunications services to end customers

       Table - Market shares in value

|Upstream market                                                    |Downstream markets                                                 |
|Wholesale market for the supply of domestic call transit services  |Retail market for the supply of fixed voice services               |
|                                                                   |DT: [50-60]%                     |Combined: [50-60]%               |
|                                                                   |GTS CE: [0-5]%                   |                                 |
|DT: [20-30]%                     |Combined: [40-50]%               |Retail supply of mobile telecommunications services                |
|GTS CE: [20-30]%                 |                                 |                                                                   |
|                                 |                                 |DT: [40-50]%                     |Combined: [40-50]%               |
|                                 |                                 |GTS CE: N/A                      |                                 |

                                                      Source: Parties' best estimate (2012)

       Table  - Market shares in volume

|Upstream market                                                    |Downstream markets                                                 |
|Wholesale market for the supply of domestic call transit services  |Retail market for the supply of fixed voice services               |
|                                                                   |DT: [40-50]%                     |Combined: [40-50]%               |
|                                                                   |GTS CE: [0-5]%                   |                                 |
|DT: [20-30]%                     |Combined: [40-50]%               |Retail supply of mobile telecommunications services                |
|GTS CE: [10-20]%                 |                                 |                                                                   |
|                                 |                                 |DT: [40-50]%                     |Combined: [40-50]%               |
|                                 |                                 |GTS CE: N/A                      |                                 |

                                                      Source: Parties' best estimate (2012)

  225) In Hungary, the Parties activities lead to a vertical relationship between  the  upstream  market  for  wholesale  domestic  call  transit
       services on fixed network and the downstream retail markets for: (i) fixed voice services and (ii) mobile telecommunications  services  to
       end customers, as can be seen from the table above.

  226) In the upstream market the Parties' main competitors are UPC (approximately [10-20]%), followed  by  Invitel  (approximately  [0-5]%)  and
       Netfone Telecom (approximately [0-5]%).

  227) In the downstream market for fixed voice services, the Parties' main competitors are Invitel (approximately [10-20]%), UPC  (approximately
       [5-10]%), Digi Telecommunications (approximately [0-5]%), UPC (approximately [5-10]%).

  228) In the downstream market for retail supply of mobile telecommunications services to end  customers,  DT  faces  competition  from  Telenor
       (approximately [30-40]% and Vodafone (approximately [20-30]%).

1 Parties' views

  229) The Parties submit that these two vertical relationships will not lead to any competition concerns.

  230) As regards a possible input foreclosure scenario, whereby the combined entity would stop  supplying  domestic  call  transit  services  to
       competing providers of fixed and mobile voice, the Parties submit that there would be no ability for them to engage in such a practice.

  231) First, the Parties claim that they will face competition on the upstream market  for  wholesale  call  transit  services  (UPC:  [10-20]%,
       Invitel: [0-5]%, Netfone Telecom: [0-5]%) which is further evidenced by DT's drop in market share since 2010.

  232) Second, the Parties submit that DT's call termination services in Hungary are subject to regulated price caps  as  well  as  transparency,
       access, tariff control, accounting separation and non-discrimination obligations.[149] Therefore, wholesale  call  transit  customers  can
       easily switch to direct interconnections to the terminating carrier's network as an alternative source of input. In particular,  MNOs  are
       directly interconnected with other networks using their own infrastructure and therefore rely little  on  call  transit  services.  As  to
       MVNOs, these often have agreements with their host MNOs which replaces the purchasing of domestic call transit services, and can also  use
       direct interconnection services.

  233) As regards a possible customer foreclosure scenario, whereby the merged entity as a fixed and mobile voice provider would  stop  procuring
       domestic call transit services from competing carriers, the Parties submit that there would be no ability for them to  engage  in  such  a
       practice. GTS has none or a negligible market share in the downstream markets (GTS CE's shares in Hungary  in  fixed  voice  services  are
       minor amounting to approx. [0-5]% and it is not active in mobile telecommunication services).

2 Results of the market investigation

  234) The market investigation indicated that  entry  barriers  on  the  upstream  market  for  wholesale  call  transit  services  are  low  or
       inexistent[150] and that the  wholesale  call  transit  market  is  declining  and  losing  importance  due  to  the  emergence  of  other
       alternatives.[151] The market investigation also indicated that the NMHH Decision regulating  the  fixed  call  termination  market  could
       provide call transit customers with an alternative input.

  235) The market investigation further indicated that the merged entity will continue to face competition from other competitors upstream  (such
       as UPC [10-20]% and Invitel [0-5]%).

       The downstream market for fixed voice services

  236) As regards a possible input foreclosure scenario, with regard to the relationship between the wholesale market for domestic  call  transit
       services upstream from the market for retail supply of  fixed  voice  services,  a  large  majority  of  the  respondents  to  the  market
       investigation confirmed that domestic call transit services do not constitute an  essential  input  for  the  provision  of  retail  fixed
       voice.[152] Moreover, they also confirmed that alternative providers of domestic call transit services will remain  available  post-merger
       and that switching demand towards such providers will be easy.[153]

  237) As regards a possible customer foreclosure scenario between the wholesale market for domestic call transit  services  and  the  downstream
       market for retail supply of fixed voice services, the market investigation revealed that DT represents a marginal proportion ([[<10-20]]%)
       of its competitors' total sales of domestic call transit services (or it is not even a customer).[154]  DT is not an important customer of
       domestic call transit services, as domestic call transit services are mainly procured by small voice carriers  that  do  not  have  direct
       interconnection agreements with other carriers' networks. Moreover, as the price of retail fixed voice services is regulated, as explained
       in section (170) above, any customer foreclosure would not be profitable. As for GTS CE, given its negligible market share  of  [0-5]%  in
       value, it cannot be considered per se as an important customer.[155] Therefore, the merged entity does not appear to have the  ability  to
       leverage its significant position in the retail market for fixed voice services in Hungary.

       The downstream market for mobile telecommunications services to end-customers

  238) Respondents to the market investigation from the demand side considered that domestic call transit services are a critical input[156]  for
       providing retail mobile telecommunication services and that DT is an important source of competitiveness.[157]

  239) However, respondents to the market investigation unanimously indicated that there are alternative suppliers such as Invitel and  UPC  that
       mobile retailers could switch to[158], although certain providers may need to build up additional capacity.

  240) In addition, respondents to the market investigation unanimously indicated that: (i) wholesale call transit services can  be  replaced  by
       interconnection agreements with terminating operators, and  that  interconnection  agreements  are  already  fully  used  by  some  mobile
       retailers;[159] (ii) it would not be profitable, according to mobile service providers, for the merged entity to stop  or  limit  offering
       wholesale domestic call transit services.[160]

  241) Finally, none of the upstream respondents to the market investigation raised concerns over customer foreclosure.

3 Commission's assessment

  242) The Commission considers that the merged entity will not have the ability to engage in input foreclosure for the following reasons.

  243) First, the Parties will continue to face competition on the upstream market, in particular taking into  account  that  barriers  to  entry
       appear to be low and that the transit market is declining.

  244) Second, the market investigation confirmed that, for certain carriers, direct interconnection agreements with  the  terminating  carrier's
       network could constitute a valid alternative to call transit services.

  245) Third, as regards the retail fixed voice market, the market investigation confirmed the Parties'  claims  that  call  transit  is  not  an
       essential input for downstream providers of fixed voice services and that such customers could easily switch to alternative  providers  of
       domestic call transit services.

  246) Fourth, as regards the retail mobile telecommunications market, the market investigation confirmed that  downstream  providers  of  mobile
       services to end customers can switch to alternative providers of call transit services and  can  alternatively  replace  call  transit  by
       direct interconnection agreements.

  247) As regards potential customer foreclosure, GTS CE has negligible shares on the downstream market for fixed voice services and  it  is  not
       active in mobile telecommunications services. As for DT, it could not be  considered  an  important  customer  of  domestic  call  transit
       services, as domestic call transit services are mainly procured by small voice carriers that do not have direct interconnection agreements
       with other carriers' networks.[161]

  248) Considering all the above and the other available evidence, the Commission concludes that the proposed transaction does not raise  serious
       doubts as to its compatibility with the internal market with respect to the vertically related Hungarian markets  for  wholesale  domestic
       call transit services upstream, and retail provision of fixed voice services and retail mobile communication services downstream.

       4 Wholesale market for end-to-end calls – retail supply of fixed voice services

       Table – Market shares in value

|                     |Upstream market                                 |Downstream markets                                 |
|                     |Wholesale supply of end-to-end calls services   |Retail supply of fixed voice services              |
|Value                |DT: N/A                      |:                 |DT: [50-60]%               |Combined: [50-60]%     |
|                     |GTS CE: EUR […]; <30%[162])  |                  |GTS CE: [0-5]%             |                       |
|Volume (subscribers) |DT: N/A                      |:                 |DT: [40-50]%               |Combined: [40-50]%     |
|                     |GTS CE: […]                  |                  |GTS CE: [0-5]%             |                       |

                                                      Source: Parties' best estimate (2012)

  249) In Hungary, the wholesale market for end-to-end calls (GTS: <30%) overlaps vertically with the downstream retail  supply  of  fixed  voice
       services. On such a market, GTS CE re-sells voice traffic capacity (comprising call origination, call termination  and  call  transit)  to
       smaller carriers and Fixed Virtual Network Operators ("FVNO").

1 Parties' view

  250) The Parties submit that the Proposed Transaction will not raise any competitive concerns.

  251) As regards a possible input foreclosure, namely the possibility that the merged entity would stop providing its end-to-end calls  services
       to competing retailers of fixed voice, the Parties submit that alternative providers of end-to-end calls  services  will  continue  to  be
       active on this market post-transaction. In addition, such FVNOs will be able to procure separate call origination,  call  termination  and
       transit at wholesale level. Finally, other competitors in the retail market for fixed voice are not dependant on GTS CE providing  end-to-
       end services. Either they procure wholesale call origination, transit and termination or they self-supply such services and thus would not
       be foreclosed. For these reasons, the merged entity would have no ability to foreclose its competitors from the retail  market  for  fixed
       voice.

  252) As regards customer foreclosure, that is the possibility that the merged  entity  would  stop  sourcing  end-to-end  calls  services  from
       competing providers for its retail fixed voice business, the Parties submit that GTS CE would represent too  small  a  share   ([0-5]%  in
       value) of the market.

2 The Commission's assessment

  253) No respondent to the market investigation raised any concern related to the impact  of  the  proposed  transaction  with  respect  to  the
       vertically related markets for wholesale end-to-end calls services and retail provision of fixed voice services in Hungary.

  254) As regards input foreclosure, post-transaction the merged entity would not have the ability  nor  the  incentive  to  foreclose  competing
       retailers of fixed voice downstream. With respect to ability, first, the Commission considers that there are alternative providers of such
       services, most notably UPC. Second, customers of end-to-end calls services will be able to procure call origination, call termination  and
       transit services separately at wholesale level, where a number of competing providers are active in Hungary. Third, call  origination  and
       call termination services are regulated, so that these services will be available at a capped price. Finally, the demand currently  served
       by GTS CE on the downstream market for fixed voice services amounts to [0-5]%. Hence,  the  effect  of  any  potential  input  foreclosure
       strategy by the merged entity would not be appreciable.

  255) As regards customer foreclosure, such a strategy can be excluded from the outset as DT currently does not  rely  on  wholesale  end-to-end
       services in order to provide its retail supply of fixed voice services.

  256) Considering all the above and the other available evidence, the Commission concludes that the proposed transaction does not raise  serious
       doubts as to its compatibility with the internal market with respect to the vertically related  markets  for  wholesale  end-to-end  calls
       services and retail provision of fixed voice services in Hungary.

5 Wholesale resale of broadband offering – retail business connectivity

  257) The market for wholesale broadband Internet access may be further divided into the following markets: wholesale unbundled  access  to  the
       local loop ("ULL"); wholesale bitstream access and resale of broadband offering.  The  competitive  assessment  will  focus  only  on  the
       possible sub-market for resale of broadband offering and its vertical relationships with the markets for retail business connectivity  and
       retail fixed voice services, as both the market for wholesale access to the ULL and the market for wholesale bitstream access (where  only
       DT is active) are regulated.[163]  These  sub-markets  are  subject  to  transparency,  non-discrimination,  access  and  interconnections
       obligations and price caps obligations.

  258) In Hungary, the Parties' activities lead to a vertical relationship between the upstream market for resale of broadband offering  and  the
       downstream market for retail business connectivity.

  259) In the upstream market for wholesale broadband offering only GTS CE is active with a very marginal turnover and market shares likely below
       25%.[164] In the downstream market for retail business connectivity the Parties' market shares amount to [40-50]%  by  revenue  (DT:  [40-
       50]%; GTS: [5-10]%) and to [30-40]% by volume (DT: [20-30]%; GTS: [5-10]%).

1 Parties’ view

  260) The Parties submit that the proposed transaction does not result in input foreclosure as GTS CE's position  in  the  upstream  market  for
       wholesale broadband offering is marginal and there are strong competitors such as Antenna Hungária and Enternet.  Likewise,  any  risk  of
       customer foreclosure would be excluded due to the Parties' marginal demand in wholesale broadband access services[165] and  the  existence
       of alternative customers active in the market for retail business connectivity such as Invitel, Antenna Hungária UPC and BT.

       2 Results of the market investigation

  261) The market investigation confirmed that the vertical relationship between the market for resale of broadband offering and the  market  for
       retail business connectivity does not lead to any foreclosure scenario. A respondent active in the upstream market for wholesale broadband
       offering services confirmed that this would be a small  market.[166]  Furthermore,  the  market  investigation  indicated  that  broadband
       offering services are not a critical input for the supply of business connectivity services.[167]

3 Commission's assessment

  262) The Commission considers that a strategy of input foreclosure of the merged entity is unlikely for the following reasons.

  263) First, GTS CE's revenues on the upstream market are limited in absolute terms and are, according to the Parties in any case below 25%.

  264) Second, the market investigation confirmed that the wholesale offering of a reseller  broadband  product  is  not  a  critical  input  for
       providing business connectivity services.

  265) Third, post-transaction alternative providers of wholesale broadband offering such as Enternet will be active on this market.

  266) Finally, the demand currently served by GTS CE on the downstream market for retail business connectivity amounts  to  [0-5]%.  Hence,  the
       effect of any potential input foreclosure strategy by the merged entity would not be appreciable.

  267) The Commission considers furthermore that a strategy of customer foreclosure of the merged entity is unlikely. First, GTS  CE’s  share  in
       the downstream market is small ([5-10]%). Second, there are other players active in the downstream market such as Invitel ([20-30]%),  UPC
       ([5-10]%), NISZ ([0-5]%) and Antenna Hungária ([0-5]%) that are likely to account  for  demand  in  wholesale  offerings  of  a  broadband
       product.

  268) Considering all the above and the other available evidence, the Commission concludes that the proposed transaction does not raise  serious
       doubts as to its compatibility with the internal market on the vertically affected markets for resale of broadband offering  services  and
       retail business connectivity.

   6 Wholesale broadband offering – retail supply of fixed voice services

       Table - Wholesale broadband offering – retail supply of fixed voice services

|                     |Upstream market                                 |Downstream markets                                 |
|                     |Re-sale broadband offering at wholesale level   |Retail supply of fixed voice services              |
|Value                |DT: N/A                      |Combined:         |DT: [50-60]%               |Combined: [50-60]%     |
|                     |GTS CE: EUR […];             |                  |GTS CE: [0-5]%             |                       |
|                     |<25%)[168]                   |                  |                           |                       |
|Volume (subscribers) |DT: N/A                      |Combined:         |DT: [40-50]%               |Combined: [40-50]%     |
|                     |GTS CE: […]                  |                  |GTS CE: [0-5]%             |                       |

                                                      Source: Parties' best estimate (2012)

  269) In Hungary, the upstream possible sub-market for a re-sale of broadband offering at wholesale level GTS CE: <25%) (part of  the  wholesale
       market for broadband access) overlaps vertically with the retail market for the supply of fixed voice services.

1 Parties' view

  270) The Parties submit that the proposed transaction will not lead to any input foreclosure scenario, whereby the  merged  entity  would  stop
       providing its wholesale broadband offering services to third-party providers of fixed voice services, for the  following  reasons.  First,
       GTS CE presence on this market is limited. Second, other providers of  wholesale  broadband  offering  such  as  Enternet  continue  post-
       transaction to exert competitive pressure on the merged entity. Third, other suppliers of retail fixed voice are not dependent on GTS CE's
       offer of wholesale broadband offering to be able to compete.

  271) As regards customer foreclosure, the Parties submit that DT demand in this upstream market is very limited.[169] As regards GTS CE,  given
       its negligible market share downstream ([0-5]% in value), it cannot be considered to be an important customer on that market either. As  a
       result, the merged entity would not have the ability to foreclose its upstream competitors.

2 Results of the market investigation

  272) The market investigation indicated that the upstream market/ segment of the resale of broadband offering is very small and qualifies as  a
       "niche market".[170]

  273) As regards a possible input foreclosure, respondents to the market investigation indicated that the resale of broadband offering is not  a
       critical input for the retail provision of fixed voice.[171]

3 The Commission's assessment

  274) The Commission considers that a strategy of input foreclosure of the merged entity is unlikely for the following reasons.

  275) First, GTS CE's limited revenues indicated that it is likely a small player on the upstream market.

  276) Second the market investigation confirmed that the wholesale resale of broadband offering is not a  critical  input  for  providing  fixed
       voice service.

  277) Third, post-transaction alternative providers of wholesale broadband offering will be active on this market (Enternet).

  278) Finally, the demand currently served by GTS CE on the downstream market for retail fixed voice services  amounts  to  [0-5]%.  Hence,  the
       effect of any potential input foreclosure strategy by the merged entity would not be appreciable.

  279)  As regards a potential strategy of customer foreclosure, the Commission considers that the merged entity’s demand for wholesale broadband
       offering would be too small for the merged entity to be able to foreclose its competitors on the upstream market.[172]

  280) Considering all the above and the other available evidence, the Commission concludes that the proposed transaction does not raise  serious
       doubts as to its compatibility with the internal market on the vertically affected markets for wholesale broadband offering  services  and
       retail provision of fixed voice services in Hungary.

7 Other vertically affected markets

  281) The Parties' activities in Hungary lead to a number of vertically affected markets. However, as  it  will  be  demonstrated  below,  these
       vertically affected markets will not raise competition concerns.

  282) The following table presents vertically affected markets in relation to upstream markets that are subject  to  market  regulation  by  the
       Hungarian telecommunication regulator NMHH.

       |Table - Wholesale regulated markets                                                                                                     |
|Upstream markets                                            |Downstream markets                                                         |
|Wholesale ULL             |DT: >30%      |GTS CE: N/A       |Retail GTS                         |DT: [0-5]%      |GTS CE: [0-5]%        |
|                          |              |                  |Wholesale GTS                      |DT: [0-5]%      |GTS CE: [0-5]%        |
|                          |              |                  |Retail business connectivity       |DT: [40-50]%    |GTS CE: [0-5]%        |
|                          |              |                  |Retail supply of fixed voice       |DT: [50-60]%    |GTS CE: [0-5]%        |
|                          |              |                  |services                           |                |                      |
|                          |              |                  |Retail supply of fixed internet    |DT: [20-30]%    |GTS CE: [0-5]%        |
|                          |              |                  |access services                    |                |                      |
|                          |              |                  |Wholesale of broadband offering    |DT: N/A         |GTS CE: <25%          |
|Wholesale Bitstream Access|DT: >30%      |GTS CE: N/A       |Retail GTS                         |DT: [0-5]%      |GTS CE: [0-5]%        |
|                          |              |                  |Wholesale GTS                      |DT: [0-5]%      |GTS CE: [0-5]%        |
|                          |              |                  |Retail business connectivity       |DT: [40-50]%    |GTS CE: [0-5]%        |
|                          |              |                  |Retail supply of fixed voice       |DT: [50-60]%    |GTS CE: [0-5]%        |
|                          |              |                  |services                           |                |                      |
|                          |              |                  |Retail supply of fixed internet    |DT: [20-30]%    |GTS CE: [0-5]%        |
|                          |              |                  |access services                    |                |                      |
|                          |              |                  |Wholesale of broadband offering    |DT: N/A         |GTS CE: <25%          |
|Wholesale fixed call      |DT: 100%      |GTS CE: 100%      |Retail GTS                         |DT: [0-5]%      |GTS CE: [0-5]%        |
|termination               |              |                  |                                   |                |                      |
|                          |              |                  |Wholesale GTS                      |DT: [0-5]%      |GTS CE: [0-5]%        |
|                          |              |                  |Retail supply of fixed voice       |DT: [50-60]%    |GTS CE: [0-5]%        |
|                          |              |                  |services                           |                |                      |
|                          |              |                  |Retail mobile telecommunications   |DT: [40-50]%    |GTS CE: N/A           |
|                          |              |                  |services                           |                |                      |
|                          |              |                  |Wholesale end-to-end calls services|DT: N/A         |GTS CE: <25%          |
|Wholesale provision of    |DT: 100%      |GTS CE: N/A       |Retail GTS                         |DT: [0-5]%      |GTS CE: [0-5]%        |
|mobile termination        |              |                  |                                   |                |                      |
|services                  |              |                  |                                   |                |                      |
|                          |              |                  |Wholesale GTS                      |DT: [0-5]%      |GTS CE: [0-5]%        |
|                          |              |                  |Retail supply of fixed voice       |DT: [50-60]%    |GTS CE: [0-5]%        |
|                          |              |                  |services                           |                |                      |
|                          |              |                  |Wholesale end-to-end calls services|DT: N/A         |GTS CE: <25%          |
|Wholesale call origination|DT: [70-80]%  |GTS CE: N/A       |Retail supply of fixed voice       |DT: [50-60]%    |GTS CE: [0-5]%        |
|at fixed location         |              |                  |services                           |                |                      |

  283) The markets for the wholesale ULL[173], Wholesale Bitstream Access[174], wholesale provision  of  fixed  call  termination  services[175],
       wholesale provision of mobile termination services[176] and wholesale market for call origination on the public  telephone  network  at  a
       fixed location[177] are vertically affected to a number of other  markets  only  on  a  technical  basis  ("one  net,  one  market").  The
       aforementioned upstream markets are regulated, which means that DT (and subsequently the merged entity) is  subject  to  obligations  with
       regard to transparency, equal treatment, accounting separation, access and interconnection related obligations as well as  cost-based  and
       controllable prices.

  284) From a competition point of view, this means that any risk of foreclosure in any of the markets vertically related to  the  abovementioned
       markets can be ruled out from the outset because: (i) DT will not have the ability to foreclose any downstream competitors by  withholding
       its input services (access and interconnection obligations); (ii) DT will not have the incentive  to  foreclose  upstream  competitors  by
       recouping losses through an increase in  prices  upstream  given  that  the  latter  are  regulated  (cost-based  and  controllable  price
       obligations).

  285) As regards the vertical relationship between a number of markets where the combined market share of the Parties exceeds  30%  upstream  or
       downstream, the proposed transaction is unlikely to raise any competition concerns, in particular, because in the corresponding downstream
       or upstream market, the Parties’ presence is too limited (combined market shares [5-10]%) to give them the ability  to  succeed  with  any
       potential foreclosure strategy. As can be seen from the table below, this concerns the retail market for GTS (vertically  related  to  the
       wholesale leased lines market, the wholesale market for domestic call transit services  and  the  wholesale  market  for  termination  and
       hosting of non-geographical numbers), the wholesale market for GTS (vertically related to the wholesale leased line market, the  wholesale
       market for domestic call transit services and the wholesale market for termination and hosting of non-geographical numbers), the wholesale
       market for Internet connectivity (vertically related to the retail business connectivity market).

|Table - Other vertically related markets not giving rise to competition concerns                                                        |
|Upstream markets                                                   |Downstream markets                                                  |
|Wholesale leased lines              |DT: [30-40]% |GTS CE:        |Retail GTS                            |DT: [0-5]%   |GTS CE: [0-5]% |
|                                    |             |[10-20]%       |                                      |             |               |
|Wholesale market for domestic call  |DT: [20-30]% |GTS CE:        |                                      |             |               |
|transit services                    |             |[20-30]%       |                                      |             |               |
|Wholesale market for termination and|DT: [40-50]% |GTS CE: N/A    |                                      |             |               |
|hosting of non-geographical numbers |             |               |                                      |             |               |
|Wholesale GTS                       |DT: [0-5]%   |GTS CE: [0-5]% |Wholesale leased lines                |DT: [30-40]% |GTS CE:        |
|                                    |             |               |                                      |             |[10-20]%       |
|                                    |             |               |Wholesale market for domestic call    |DT: [20-30]% |GTS CE:        |
|                                    |             |               |transit services                      |             |[20-30]%       |
|                                    |             |               |Wholesale market for termination and  |DT: [40-50]% |GTS CE: N/A    |
|                                    |             |               |hosting of non-geographical numbers   |             |               |
|Wholesale Internet connectivity: IP |DT: [0-5]%   |GTS CE: [0-5]% |Retail business connectivity          |DT: [40-50]% |GTS CE: [0-5]% |
|Transit                             |             |               |                                      |             |               |

  286) As regards the vertical relationship between the wholesale market for termination and hosting of non-geographical numbers  (DT:  [40-50]%)
       and the retail market for the supply of fixed voice services (DT: [50-60]% GTS: [0-5]%), the  proposed  Transaction  will  not  raise  any
       competition concerns. Customer foreclosure can be ruled out because the increment brought about by the transaction in  the  retail  market
       for the supply of fixed voice services is insignificant ([0-5]%). Therefore, GTS CE's market presence downstream is too insignificant  for
       it to be regarded as an important customer in that downstream market.

  287) As regards the vertical relationship between the wholesale market for domestic call transit  (DT:  [20-30]%  GTS  CE:  [20-30]%)  and  the
       wholesale market for end-to-end calls services (DT: N/A GTS CE: <25%), the proposed Transaction will not raise any  competition  concerns.
       In particular, no input foreclosure will occur because (i) several other competitors upstream will continue, post-transaction, to exercise
       competitive pressure on the merged entity (UPC, Netfone Telecom, Türk Telecom, British Telecom, etc.). (ii) Barriers  to  entry  are  low,
       since the regulation of the wholesale market for the provision of fixed call termination imposes access and  interconnection  obligations,
       as well as price control, on every fixed voice operator. This regulation allows every new call transit carrier to  interconnect  with  the
       networks of every other fixed voice services provider. As regards customer foreclosure, GTS CE's market presence downstream is  negligible
       (<25%) so that it could not be considered as an important customer. In addition, several other competitors are active  on  the  downstream
       market for the provision of end-to-end calls services (such as Enternet). Moreover, retailers of fixed  voice  services  or  retailers  of
       mobile telecommunications services also demand domestic call transit services so that alternative customers will still  be  present  post-
       transaction.

  288) Finally, no respondent to the market investigation raised any concern related to the impact of the proposed transaction  with  respect  to
       the vertical relationships between the upstream and downstream markets listed in tables 7 and 8 above in Hungary.

  289) Considering all the above and the other available evidence, the Commission concludes that the proposed transaction does not raise  serious
       doubts as to its compatibility with the internal market with respect to the vertical relationships assessed in section 5.1.3.7.

4 Conglomerate effects

1 Markets for retail business connectivity and retail supply of mobile telecommunications services

  290) In Hungary, the Parties are active in retail business connectivity (where DT's market share amounts to [40-50]% and GTS CE's market  share
       equates [0-5]%). DT is active in mobile telecommunications services with a market share of [40-50]%.

  291) One respondent to the market investigation raised concerns about a potential bundling between mobile telecommunication services and retail
       business connectivity. Indeed customers of GTS CE procure mobile services separately. In the wake of the Transaction,  the  merged  entity
       would be able to offer them mobile services bundled with retail business connectivity they already source from GTS CE.

  292) The Commission considers that the Transaction will not affect the ability of the merged entity  to  supply  bundled  mobile  services  and
       retail business connectivity.

  293) First, prior to the Transaction, DT is already significantly engaged in both these markets. Its market share  in  the  market  for  retail
       supply of mobile telecommunication services amounts to [40-50]%, while its market share in the market for retail business connectivity  is
       between [30-40]% and [40-50]% depending on the precise market definition.

  294) Second, the Transaction does not bring about any significant change in this regard. GTS CE is not active in the market for  retail  supply
       of mobile telecommunication services. As regards the market for retail business connectivity, its market share is limited and in any  case
       between [0-5]% and [5-10]% depending on the precise market definition.

  295) Considering all the above and the other available evidence, the Commission concludes that the proposed transaction does not raise  serious
       doubts as to its compatibility with the internal market with respect to potential conglomerate effects on the markets for retail  business
       connectivity and retail mobile telecommunications services in Hungary.

   2 Romania

1 Parties' activities

  296) GTS CE Romania focuses, at retail level, on providing business customers with  fixed-line  telecommunication  services  such  as  internet
       connectivity, including VPN, voice, data and cloud services. On wholesale level, GTS CE provides mainly data services and  voice  services
       to other carriers (global communication carriers, regional carriers, re-sellers etc). GTS CE does not offer its  services  to  residential
       customers.

  297) The DT Group is indirectly present in Romania via Cosmote Romania Mobile Telecommunications  ("Cosmote")  and  Romtelecom,  the  incumbent
       fixed telephony operator in Romania. Romtelecom is one of the largest local fixed network operators in Romania and focuses on  the  retail
       level on supplying both business and residential customers with fixed-network voice, internet, TV, ICT and  cloud  services.  DT  is  also
       active on the Romanian market via Combridge, another entity within the DT Group, which operates a fibre network and offers a large set  of
       ICT services. The Parties submit that Combridge is not active on the horizontally affected markets of wholesale leased lines and wholesale
       provision of domestic call transit services on fixed networks. On the markets for retail business connectivity services and  retail  fixed
       voice services Combridge’s market share is [0-5]%.

2 Horizontally affected markets

  298) The parties' activities overlap horizontally  on  six  potential  relevant  product  markets:  wholesale  leased  lines,  retail  business
       connectivity, retail supply of fixed voice services, wholesale provision of  domestic  call  transit  services,  retail  supply  of  fixed
       internet access services, and wholesale end-to-end calls. These are  also  horizontally  affected  markets,  with  the  exception  of  the
       wholesale market for end-to-end calls (where the Parties' combined market share equates [10-20]%).

1 Wholesale leased lines market

  299) The Parties estimate the size of the market for wholesale leased lines to be EUR 13,1 million in 2012.

  300) In this market, the Parties offer legacy wholesale leased lines services in both the terminating segment (used  for  customer  access  and
       backhaul) and in the trunk segment (used for backbone transmission), as well  as  end-to–end  circuits  and  POP2POP[178]  links.  In  the
       wholesale leased lines market, the Parties submit that they have a combined market share of [30-40]%  in  value  and  [10-20]%  in  volume
       (number of lines). If a separate market for dark fibre were considered, the Parties' combined market share would amount to [0-5]% in value
       (DT: [0-5]%; GTS CE: [0-5]%). The table below gives an overview of estimated market  shares  of  the  Parties  on  various  possible  sub-
       segments.

       Table  - Market shares by value and by volume in the wholesale leased lines market

| Main Market                                                        |Possible sub-segments                                            |
|Wholesale leased lines                                              |Trunk segment                                                    |
|value: [30-40]%                 |Volume: [10-20]%                   |Value: [5-10]%                    |Volume: [0-5]%               |
|DT:[20-30]%                     |DT: [10-20]%                       |DT: [0-5]%                        |DT: [0-5]%                   |
|GTS CE: [10-20]%                |GTS CE: [0-5]%                     |GTS CE: [0-5]%                    |GTS CE: [0-5]%               |
|                                |                                   |Terminating segment                                              |
|                                |                                   |Value: [60-70]%                   |volume: :[20-30]             |
|                                |                                   |DT: [40-50]%                      |DT: :[20-30]%                |
|                                |                                   |GTS CE: [10-20]%                  |GTS CE: [0-5]%               |
|                                |                                   |Terminating segment of leased lines with bandwidth above 2 Mbps  |
|                                |                                   |Value:[60-70]%                    |volume: [10-20]%             |
|                                |                                   |DT: :[20-30]%                     |DT: [5-10]%                  |
|                                |                                   |GTS CE: [40-50]%                  |GTS CE: [5-10]%              |
|                                |                                   |Terminating segment of leased lines with bandwidth below 2 Mbps  |
|                                |                                   |Value:[60-70]%                    |Volume: [30-40]%             |
|                                |                                   |DT: [60-70]%                      |DT: [30-40]%                 |
|                                |                                   |GTS CE: [0-5]%                    |GTS CE: [0-5]%               |

                                                      Source: Parties' best estimate (2012)

1 Parties’ view

  301) The Parties submit that the horizontal overlap in the Romanian wholesale leased lines market will not lead to a significant impediment  to
       effective competition.

  302) The Parties claim that the wholesale leased lines market is characterised by strong presence of cable, fibre  and  mobile  operators  with
       national coverage and their own backbone infrastructure, capable of providing both high-speed and low  speed  leased  lines  to  wholesale
       customers. The Parties further submit that they face strong competition from a number of providers such as RCS&RDS ([20-30]%), Orange ([20-
       30]%), Vodafone ([10-20]%), UPC, Digital Cable Systems, Euroweb and Prime Telecom.

  303) Specifically with regard to the possible trunk segment, the Parties consider that it is less relevant for their activities, as the Parties
       generate most of their revenues from the terminating segment. Furthermore, there are 14 operators active on this market (such  as  RCS&RDS
       ([20-30]%), Orange ([10-20]%), Vodafone ([10-20]%), Prime Telecom, UPC, S.N. Radiocomunicatii, Direct One etc).  The  national  regulator,
       ANCOM, has found the trunk segment to be competitive and therefore, this possible market segment is not regulated.[179]

  304) With regard to the possible terminating segment of leased lines, the Parties submit that their activities have  different  focuses:  while
       GTS CE provides wholesale leased lines with bandwidth over 2 Mbps (only [10-20]% of  GTS  CE's  revenues  result  from  leased  line  with
       bandwidth below 2 Mbps), DT exclusively provides low bandwidth (under and including 2 Mbps) wholesale leased  lines.  These  leased  lines
       provided by DT are mainly provided over its copper access network. By contrast,  leased  lines  with  bandwidth  above  2  Mbps[180]   are
       provided over fibre optic infrastructure, where DT's coverage is comparably lower than the coverage  of  its  main  competitors  (such  as
       RCS&RDS and Orange).

  305) The Parties further submit that GTS CE is a small, niche player in this market, focused on providing high-speed wholesale leased lines  on
       the basis of Ethernet and dark fibre.[181]

  306) In the terminating segment, the Parties submit that the possible sub-segment of leased lines with bandwidth below and including 2 Mbps  is
       regulated.[182] Thus DT (Romtelecom) is  subject,  inter  alia,  to  tariff  control,  access  and  non-discrimination  obligations.  Such
       obligations would thwart any attempt on the merged entity's behalf to exert market power. By contrast, the national  regulator  had  found
       that the terminating segment of leased lines with bandwidth above 2Mbps was competitive and has not imposed any regulatory  provisions  on
       DT.

  307) In the terminating segment, the Parties further submit that they will continue to face strong competition from competitors such as RCS&RDS
       ([20-30]%), Orange ([10-20]%), Euroweb ([5-10]%) and Prime Telecom ([0-5]%).

  308) Finally, if a separate market for dark fibre were considered, then the Parties' combined market share on such a wholesale  market  is  low
       ([0-5]%) and many strong competitors are present in the market such as Teletrans ([20-30]%), Telecomunicatii CFR ([20-30]%), Orange  ([10-
       20]%), RCS&RDS ([10-20]%), Electrogrup ([10-20]%).

2 Results of the market investigation

  309) The overwhelming majority of respondents considered that barriers to entry on the Romanian wholesale leased lines market were high[183] on
       all potential market segments  due  to  a  number  of  factors  such  as  strong  competition,  low  tariffs  for  these  services,  legal
       requirements[184], and well-developed existing infrastructures. Moreover, the majority of the respondents were of the opinion  that  newer
       alternative solutions such as VPN and Ethernet have not lowered barriers to entry on  this  market.[185]  Nevertheless,  the  majority  of
       respondents consider that cheaper VPN and Ethernet solutions are in the process of replacing traditional leased lines.[186]

  310) Most market players do not perceive GTS CE as a very close competitor to DT, but rather as one of the smaller players in the  market.[187]
       The closest competitors to DT would be Orange and RCS&RDS, followed by GTS CE, Prime  Telecom,  Euroweb  and  Vodafone.  Some  respondents
       perceived DT as the closest competitor to GTS CE.[188] On the other hand,  some  competitors  indicated  that  GTS  CE  does  not  have  a
       considerable national footprint in Romania, its strength rather residing in  its  international  focus.[189]  In  addition,  while  a  few
       competitors consider DT as an innovative player in the market, GTS CE is not perceived as an innovative operator.[190]

  311) While all respondents indicated that it would probably be more difficult to compete against the merged entity  following  the  transaction
       due to a larger network and better services portofolio[191], they also recognised the existence  of  other  competitors  on  this  market,
       including RCS&RDS, Orange, Vodafone, UPC, Prime Telecom and Euroweb[192],  which  have  their  own  national  infrastructure  and  provide
       wholesale services nationally. Moreover, most respondents do not expect significant changes on the wholesale market or increases of prices
       at wholesale level post-transaction.[193]

3 Commission's assessment

  312) The Commission considers that the proposed transaction does not result in competition concerns on the wholesale leased lines market.

  313) While the market investigation provided some indications that barriers to entry on this market may  be  appreciable,  ANCOM's  statistical
       report of June 2013[194] shows 27 wholesale providers of leased lines services  operating  on  active  (Ethernet/SDH  based)  and  passive
       networks (dark fibre) or using alternative technologies such as fixed  radio,  cable,  unbundled  copper  and  VSAT  operate  in  Romania.
       Accordingly, between December 2012 and June 2013, the number of wholesale providers had  increased  from  17  to  27.  Furthermore,  ANCOM
       confirmed that, in its assessment, barriers to entry on this market are low.[195]

  314) In any event, the market investigation confirmed that the Parties are not closest competitors  and  that  there  are  a  number  of  other
       competitors operating their own national network which will continue to exercise competitive  pressure  on  the  merged  entity,  such  as
       RCS&RDS ([20-30]%), Orange ([20-30]%), Vodafone ([10-20]%), UPC, Euroweb and Prime Telecom.

  315) In relation to the trunk segment, the Commission considers that no competition concerns should arise. The combined  market  share  of  the
       Parties of [5-10]% is far below a level which could give rise to competitive concerns and the increment brought by the transaction is also
       insignificant ([0-5]%). Moreover, the competitiveness of this market segment has previously  been  recognised  by  ANCOM,  which  has  not
       imposed any regulatory measures with regard to the trunk segment since the first market  review  of  2003.  The  Romanian  regulator  also
       considers that barriers to entry are low in this market segment, as exemplified by the recent entry of operator Direct One.[196]

  316) As regards the terminating segment of leased lines, while the Parties' combined market share of [60-70]%  is considerably higher  than  in
       the trunk segment, competition concerns are unlikely to arise as a number of alternative providers in the terminating  segment,  including
       RCS&RDS, Orange, UPC, Prime Telecom, S.N. Radiocomunicatii and Euroweb operating their own national  backbone  network  will  continue  to
       exercise significant competitive pressure on the merged entity.

  317) Specifically in the possible market segment of leased lines with bandwidth below and including 2 Mbps, as  mentioned  in  paragraph  (306)
       above, ANCOM has imposed on DT regulatory  obligations  comprising  transparency,  equal  treatment,  accounting  separation,  access  and
       interconnection-related obligations, as well as cost-based and controllable tariffs.[197] Therefore, potential  competitive  concerns  are
       captured from the outset by the regulatory provisions imposed on DT. These obligations will  continue  to  apply  to  the  merged  entity.
       Furthermore, other providers are active in this segment such as Orange ([10-20]%), RCS&RDS ([10-20]%), Euroweb ([5-10]%),  Prime  Telecom,
       Interoute, Dial Telecom, and Digicom Systems (all around [0-5]%).[198]

  318) As regards the possible market segment of leased lines with bandwidth above 2 Mbps, no competition concerns are likely to arise given  the
       number of active providers[199] in this segment: RCS&RDS ([20-30]%), Orange  ([10-20]%),  Euroweb  ([10-20]%),  Prime  Telecom  ([5-10]%),
       Teletrans ([5-10]%), Interoute ([5-10]%), Dial  Telecom,  Digicom  Systems,  Netaccess  and  SVF  Management  Prod  Serv  (all  <5%).[200]
       Furthermore, ANCOM has found this possible market segment to be competitive and therefore this market segment is not regulated.[201]

  319) Finally, if a separate market for wholesale dark fibre was considered, given the very low combined market share of  the  Parties  ([0-5]%)
       and the presence of other suppliers of dark fibre such as Teletrans ([20-30]%), Telecomunicatii CFR ([20-30]%), Orange ([10-20]%), RCS&RDS
       ([10-20]%) and Electrogrup ([10-20]%)[202], no competition concerns is likely to arise on this possible market. In addition, the  Parties'
       combined market share in a market for wholesale leased lines excluding dark fibre would not change significantly.[203]

  320) In light of the above, the Commission concludes that the proposed transaction does not raise serious doubts as to its  compatibility  with
       the internal market on wholesale leased lines market and its possible segments in Romania.

2 Retail market for business connectivity

  321) The Parties estimate the size of the market for retail business connectivity to be EUR 127,3 million in 2012.

  322) On this market, the Parties have a combined market share of [30-40]% (DT [20-30]%, GTS CE [0-5]%). Both Parties are active  on  the  three
       possible market segments of broadband access, retail leased lines and VPN services, as shown in the table below:

       Table  - Market shares by value and by volume in the retail market for business connectivity

|Main Market                                                        |Possible sub-segments                                        |
|Retail market for business connectivity                            |Broadband access                                             |
|                                                                   |Value: [40-50]%                  |Volume: [20-30]%           |
|                                                                   |DT: [30-40]%                     |DT: [10-20]%               |
|                                                                   |GTS: [5-10]%                     |GTS: [0-5]%                |
|                                                                   |Leased lines                                                 |
|Value: [30-40]%                |Volume: [20-30]%                   |Value: [20-30]%                  |Volume: [40-50]%           |
|DT: [20-30]%                   |DT: [20-30]%                       |DT: [20-30]%                     |DT: [40-50]%               |
|GTS: [0-5]%                    |GTS: [0-5]%                        |GTS: [0-5]%                      |GTS: [0-5]%                |
|                               |                                   |VPN                                                          |
|                               |                                   |Value: [20-30]%                  |Volume: [20-30]%           |
|                               |                                   |DT: [20-30]%                     |DT: [20-30]%               |
|                               |                                   |GTS: [0-5]%                      |GTS: [0-5]%                |

                                                      Source: Parties' best estimates (2012)

1 Parties’ view

  323) The Parties submit that the horizontal overlap in the Romanian retail  business  connectivity  market  will  not  lead  to  a  significant
       impediment to effective competition.

  324) The Parties claim that DT's market share is currently declining[204], as a result of increasing  competitive  pressure  from  higher-speed
       alternative technologies such as (VPN and Ethernet solutions). These technologies  are  becoming  the  preferred  means  for  connectivity
       solutions.[205] Furthermore, the Parties submit that they face strong competition from many alternative providers[206]  such  as  Vodafone
       ([20-30]%), Orange ([10-20]%), RCS&RDS ([5-10]%) and UPC ([0-5]%) and niche providers such as Prime Telecom and  Euroweb[207],  which  are
       focusing on large customers. Moreover, the Parties submit that barriers to entry on this market are low, in total a number  of  44  retail
       providers of data transmission services (including VPN services) and  16  active  providers  of  retail  leased  lines  services  reported
       statistical data to the national regulatory authority (ANCOM) in 2012.[208]

  325) The Parties further claim that GTS CE is a rather small player in the Romanian retail business connectivity market and therefore they  are
       not close competitors.

2 Results of the market investigation

  326) All respondents considered that incentives to enter the market for retail business connectivity, for all market segments, are low[209] due
       to a number of factors, including strong competition, aggressive pricing from competitors and low average  revenues  per  user  for  these
       services compared to other European countries. Moreover, there are certain barriers to entry such  as  unclear  procedures  regarding  the
       authorisation to deploy fixed infrastructure at national level. However,  the  market  investigation  confirmed  that  the  Parties  would
       continue to face significant competitive pressure from a number of mobile providers such as Vodafone and Orange, cable providers  such  as
       RCS&RDS and UPC, as well as from niche players such as Euroweb and Prime Telecom.[210]  The  suppliers  of  such  services  have  networks
       covering the whole country[211] and usually provide all (broadband access, dedicated capacity via leased lines and  VPN  services)  or  at
       least two retail business connectivity services.[212]

  327) The data gathered during the market investigation confirms that the Parties are not close competitors in  this  market.[213]  Most  market
       participants identified Vodafone, RCS&RDS, Orange and UPC as being closer competitors to DT. None of  the  customers  of  retail  business
       connectivity identified GTS CE as a top player in this market.[214] Furthermore, while DT was considered  an  innovative  player  in  this
       market by the majority of respondents, that was not the case for GTS.[215] This suggests that GTS CE is one of the small  players  in  the
       Romanian business connectivity market.

  328) Finally, neither the suppliers, nor the customers of retail business connectivity expected  an  increase  in  prices  of  retail  business
       connectivity following the transaction.

3 Commission's assessment

  329) The Commission considers that the proposed transaction does not result in competitive concerns on the retail business connectivity market.
       First, GTS CE's presence on this market is generally small ([0-5]% in the retail market for  business  connectivity  and  [5-10]%  on  the
       possible sub-segment for broadband access – in value). Likewise, GTS CE's market share in volume is always [0-5]% for all possible  market
       segments.

  330) Second, the combined market share of the Parties based on volume remains [20-30]% for all possible market segments, with the exception  of
       the possible segment of retail leased lines, where the Parties' combined market share by volume is [40-50]% (DT [40-50]%, GTS [0-5]%) with
       the increment brought about by the transaction in this possible sub-segment being insignificant. Furthermore, the terminating  segment  of
       leased lines with bandwidth below and including 2 Mbps, which is the main focus of DT, is regulated. The combined market share in value is
       around [30-40]% in the overall market and below or equal to [40-50]% in all possible segments.

  331) Third, a number of competitors such as Vodafone ([20-30]%), Orange ([10-20]%), RCS&RDS ([5-10]%),  UPC  ([0-5]%)[216]  and  niche  players
       focusing on large customers such as Prime Telecom and Euroweb will continue to compete and constrain the merged entity.

  332) Fourth, the market investigation confirmed that GTS CE is not a close competitor of DT.

  333) In the light of the above, and in particular given the small increment, as well as the presence of several competitors on this market, the
       Commission concludes that the proposed transaction does not raise serious doubts as to its  compatibility  with  the  internal  market  on
       retail market for business connectivity and its possible segments in Romania.

3 Market for retail supply of fixed voice services

  334) The Parties estimate the size of the market for retail supply of fixed voice services to be EUR 334,8 million in 2012.

  335) On this market, DT, as the incumbent operator for fixed voice services, has a significant market share ([70-80]%  in  value,  [40-50]%  in
       volume-number of lines). If managed VoIP and home zone products are excluded, the market share of DT would amount to  [90-100]%  in  value
       and [60-70]% in volume. However, the increment brought by the transaction is only [0-5]% in value and [0-5]% in volume  (GTS  CE  being  a
       niche player) and remains [0-5]% for each of the possible market segments.

1 Parties’ view

  336) The Parties submit that DT faces intense price competition from players such as Vodafone ([10-20]%), Orange ([5-10]%) or RCS&RDS ([0-5]%),
       which has led to a constant decrease in DT's market share since 2008. Several of these competitors offer fixed voice services bundled with
       other services at low prices and for free. The Parties also claim that the barriers to entry are low, as can be seen by the 32 alternative
       fixed operators who operate their own  infrastructures  to  provide  fixed  voice  services  since  the  liberalisation  of  the  Romanian
       telecommunications market in 2003.

  337) Finally, the Parties submit that there is increasing competitive pressure exercised on  the  market  for  retail  supply  of  fixed  voice
       services by the mobile voice market, as customers prefer to migrate to personalised and cheaper mobile services (so-called fixed to mobile
       conversion).

2 Commission’s assessment

  338) The Commission notes, first, that no respondent to the market investigation raised any concern related  to  the  impact  of  the  proposed
       transaction with respect to the market for retail supply of fixed voice services in Romania.

  339) Second, the increment of [0-5]% brought about by the transaction is insignificant and alternative providers will remain  present  on  this
       market.

  340) For these reasons, the Commission considers that the Transaction does not raise serious doubts as to its compatibility with  the  internal
       market on the market for retail supply of fixed voice services in Romania.

       4 Wholesale market for provision of call transit services on fixed networks

  341) The Parties estimate the size of the wholesale market for provision of domestic call transit services on fixed  networks  to  be  EUR  0,2
       million in 2012.

  342) On this market, the Parties have a combined market share in value of [70-80]% (DT's [60-70]%, GTS CE [5-10]%) and [50-60]% in  volume[217]
       (DT: [50-60]% GTS CE: [0-5]%).

1 Parties’ view

  343) The Parties submit that DT's market presence has been steadily declining in the past few years, due to the competitive constraint  exerted
       by players such as Net-Connect internet ([10-20]%) or Dial Telecom ([5-10]%). The Notifying Party  moreover  submits  that  the  continued
       adoption of VoIP exerts a significant competitive pressure on the market for the wholesale provision of call  transit  services  on  fixed
       networks. This explains why no new player has recently entered this market, in spite of the low barriers to entry in technical respects.

2 Commission assessment

  344) Any potential risks of anticompetitive effects resulting from the proposed transaction in the wholesale call transit market  are  captured
       by the fact that the national regulator ANCOM has imposed on  DT  the  duty  to  transit  calls  in  its  nationwide  network  on  a  non-
       discriminatory basis, the fees for this service being subject to strict cost-based price regulation.[218]

  345) The Commission also notes that no respondent to the market investigation raised  any  concern  related  to  the  impact  of  the  proposed
       transaction with respect to the wholesale market for provision of call transit services on fixed networks in Romania.

  346) Given in particular the obligations imposed by the national regulator, ANCOM on DT, and the presence  of  alternative  suppliers  of  call
       transit as listed in paragraph (343) above, the Commission considers that the  Transaction  does  not  raise  serious  doubts  as  to  its
       compatibility with the internal market on the wholesale market for provision of call transit services on fixed networks in Romania.

5 Market for retail supply of fixed internet access services

  347) The Parties estimate the size of the market for retail supply of fixed internet access services to be EUR 271,8 million in 2012.

  348) In the market for retail supply of fixed internet access services DT has a market share of [20-30]% in value and the increment brought  by
       the transaction will be less than [0-5]% for both the narrowband and broadband  segment,   as  GTS  is  practically  not  active  on  this
       market.[219]

  349) The Commission also notes that no respondent to the market investigation raised  any  concern  related  to  the  impact  of  the  proposed
       transaction with respect to the market for retail supply of fixed internet access services in Romania.

  350) Given the insignificant increment brought by the transaction, the Commission considers that the Transaction does not raise serious  doubts
       as to its compatibility with the internal market on the market for retail supply of fixed internet access services in Romania.

3 Vertically affected markets

  351) As shown in the table below, the market for wholesale leased  lines  is  vertically  related  to  both  the  market  for  retail  business
       connectivity and the market retail mobile telecommunications to end customers.

       Table  Vertically affected  markets:  Wholesale  leased  lines  market  –  retail  business  connectivity  and  retail  supply  of  mobile
       telecommunication services

|Upstream market                                                    |Downstream markets                                                 |
|Wholesale Leased Lines Market                                      |Retail market for Business connectivity                            |
|Value [30-40]*. (DT:[20-30]%, GTS CE: [10-20]% )                   |                                                                   |
|Volume [10-20]% (DT: [10-20]%, GTS: [0-5]%)                        |                                                                   |
|                                                                   |Value (DT: [20-30]%, GTS CE:     |Combined: [30-40]%               |
|                                                                   |[0-5]%)                          |                                 |
|Trunk segment                    |Terminating segment              |Retail supply of mobile telecommunications services                |
|Value: [5-10]% (DT:              |Value: [60-70]% (DT:[40-50]%,    |                                                                   |
|[0-5]%, GTS CE: [0-5]% )         |GTS: [10-20]% )                  |                                                                   |
|Volume: [0-5]% (DT: [0-5]%, GTS: |Volume: [20-30]% (DT:[20-30]%,   |                                                                   |
|[0-5]%)                          |GTS: [0-5]% )                    |                                                                   |
|                                 |                                 |DT: [10-20]%                     |Combined: [10-20]%               |
|                                 |                                 |GTS CE: N/A                      |                                 |

       1 Wholesale leased lines market – Retail business connectivity market

  352) Both DT and GTS CE are active in the upstream market for wholesale leased lines (combined market share [30-40]%) and the downstream market
       for retail business connectivity ([30-40]%).

1 Parties' view

  353) The Parties submit that the proposed transaction will not give rise to any risk of input foreclosure as sufficient leased lines  resources
       upstream remain available for the merged entities' downstream competitors. This is because: (i) other competitors  remain  active  in  the
       upstream market, (ii) GTS CE has a relatively small market share upstream ([10-20]%) and (iii) GTS CE has small market share  ([0-5]%)  in
       the downstream retail market for business connectivity.

  354) As regards the trunk segment, the Parties submit that neither DT nor GTS CE has significant activities in this segment.

  355) As regards the terminating segment, the Parties submit that their activities have different focuses: DT has a clear focus on  transmission
       speeds below and including 2 Mbp, while GTS CE is primarily active in the high-speed segment. Given  this  complementarity  upstream,  the
       vertical links between the activities of the Parties do not lend themselves to increase DT’s ability and incentive to engage in  an  input
       foreclosure strategy vis-à-vis its competitors in the retail market for business connectivity.  Furthermore,  as  mentioned  in  paragraph
       (306) above, the terminating segment of leased lines with transmission speed below and including 2 Mbps is a regulated market.

  356) The Parties further submit that the importance of legacy leased lines at  the  wholesale  level  for  the  provision  of  retail  business
       connectivity services will decline rapidly as a result of the increased shift towards  Ethernet  and  IP  VPN  solutions.  Thus,  business
       customers' demand can be met by other solutions such as Ethernet and VPN.

  357) With regard to a hypothetical customer foreclosure scenario, the Parties submit that, as  GTS  CE  is  not  an  important  player  on  the
       downstream market, their competitors at wholesale level will be able to continue selling their  services  to  a  number  of  providers  of
       business connectivity at retail level.

2 Results of the market investigation

  358) With respect to possible customer foreclosure, suppliers of wholesale leased lines did not raise any concerns and pointed out  that  there
       were other alternative customers that they could supply.[220]  Most respondents could not appreciate whether it would  be  profitable  for
       the merged entity to stop acquiring wholesale leased lines services post-transaction.[221]

  359) With respect to possible input foreclosure, the market investigation revealed, first, that customers of wholesale leased  lines  were  not
       concerned that, post-transaction, the merged entity would stop supplying wholesale  leased  lines  for  the  purpose  of  retail  business
       connectivity. Second, the majority of respondents do not consider leased lines an essential input  for  the  purpose  of  retail  business
       connectivity[222] Third, they pointed out that there are other alternative solutions such as VPN or Ethernet which can replace, or  put  a
       competitive constraint on the price of, leased lines for the purpose of offering retail business connectivity services.[223] Fourth,  most
       respondents consider that there are other suppliers in the upstream market from whom  they  can  source  leased  lines[224],  even  though
       switching their demand could involve some switching costs.[225] Fifth, customers of wholesale leased lines services generally source  from
       more than one provider of wholesale leased lines services.[226] Sixth, all respondents were of the opinion that it would not be profitable
       for the merged entity to stop supplying leased lines post-transaction.[227]

       3 Commission's assessment

  360) The Commission considers that the merged entity would not have the ability or the incentive to engage in a customer foreclosure  strategy.
       First, other potential customers of wholesale leased lines such as Orange or Vodafone (see paragraph (331)) above remain  present  on  the
       downstream market of retail business connectivity. Second, both DT and GTS CE are already  vertically  integrated  on  these  markets  and
       source leased lines internally to a large extent. Third, GTS CE's market share on the downstream market for retail  business  connectivity
       is low ([0-5]%). Thus, its demand for leased lines for the purpose of providing business connectivity services is too low to foreclose the
       merged entity's competitors in the upstream market.

  361) As regards a possible input foreclosure scenario the Commission notes, first, that most business connectivity providers  do  not  consider
       leased lines as an essential input for their services. As confirmed by the market investigation, other products such as  VPN  or  Ethernet
       solutions also serve as input for business connectivity services and can be expected to exercise competitive constraint on  the  wholesale
       leased lines market. Second, there are other suppliers such as Orange and RCS&RDS in the upstream market of wholesale  leased  lines  from
       whom providers of retail business connectivity service can source leased lines. While this may involve  some  switching  cost,  downstream
       providers usually do multi-source from several upstream suppliers. Third, the Commission notes  that  none  of  the  market  investigation
       respondents considered that the merged entity would have the incentive to adopt an input foreclosure strategy.

  362) In light of the above, the Commission concludes that the proposed transaction does not raise serious doubts as to its  compatibility  with
       the internal market as a result of the vertical relationship between the activities of the Parties on the wholesale  leased  lines  market
       and the retail business connectivity market.

2 Wholesale leased lines market – Retail supply of mobile telecommunication services to end customers

  363) Both DT and GTS CE are active in the upstream market for wholesale leased lines (combined market share [30-40]%), but only DT  is  active,
       via Cosmote, on the downstream market for retail mobile telecommunications to end customers ([10-20]%).

1 Parties' view

  364) The Parties submit that, post-transaction, DT will neither have the ability, nor  the  incentive  to  foreclose  its  competitors  on  the
       downstream market:

  365) First, DT's competitors on the retail mobile telecommunications  services  to  end  customers  dispose  of  extensive  networks  providing
       terminating connectivity to their base stations. Against this background, MNO's demand  in  the  terminating  segment  mainly  relates  to
       limited purchases to provide additional capacity from their own existing network and to connect base stations  with  their  core  network.
       Moreover, there are a number of upstream providers of leased lines, from which MNOs can source their demand. Furthermore,  the  costs  for
       wholesale leased lines are only a small proportion of the overall costs of providing retail mobile telecommunications.

  366) Second, DT's market share on the downstream market is limited, so there is little prospect of  DT  being  able  to  recapture  significant
       retail sales in response to an input foreclosure strategy.

  367) The Parties also submit that no concerns will arise with regard to customer foreclosure, as there are alternative customers  of  wholesale
       leased lines on the downstream market for retail mobile telecommunications such as Orange ([30-40]%), Vodafone  ([30-40]%),  RCS&RDS  ([5-
       10]%).

2 Results of the market investigation

  368) The market investigation revealed that suppliers of wholesale leased lines services are not concerned by a possible  customer  foreclosure
       scenario. DT does not currently source wholesale leased lines services for  the  purpose  of  providing  retail  mobile  telecommunication
       services.

  369) The market investigation revealed that customers of leased lines on the downstream market for retail  mobile  telecommunications  are  not
       concerned that the merged entity would stop supplying them with wholesale leased lines services. While one of  two  respondents  considers
       that leased lines are an essential input[228], both respondents indicate that there are alternative solutions to leased lines  -  such  as
       VPN and Ethernet (delivered via microwave technology) - that can be used to provide retail mobile telecommunication services.[229]

  370) The respondents also indicate that they multisource[230] and there are alternative providers of leased  lines[231]  to  which  they  could
       easily switch.[232] Finally, the respondents consider that, in their opinion, it would not be profitable for DT  to  stop  providing  this
       input to the retailers of mobile telecommunications services.[233]

3 Commission's assessment

  371) The Commission considers that the proposed transaction is unlikely to result in a risk of input foreclosure. First,  providers  of  retail
       mobile communications services consider that there are alternative technologies such as VPN or Ethernet solutions that also serve as input
       for mobile services. Second, there are other suppliers such as Orange and  RCS&RDS  (see  paragraph  (331))  in  the  upstream  market  of
       wholesale leased lines from whom providers of retail mobile telecommunications can source leased lines. Third, the Commission  notes  that
       none of the respondents to the market investigation considered that the  merged  entity  would  have  the  incentive  to  adopt  an  input
       foreclosure strategy or expressed any concern in this regard.

  372) In light of the above, the Commission concludes that the proposed transaction does not raise serious doubts as to its  compatibility  with
       the internal market as a result of the vertical relationship between the activities of the Parties on the wholesale  leased  lines  market
       and the market for retail supply of mobile telecommunications.

3 Other vertically affected markets

  373) The Parties' activities in Romania lead to a number of vertically  affected  markets.  However,  as  will  be  demonstrated  below,  these
       vertically affected markets will not raise competition concerns.

  374) The following table presents vertically affected markets in relation to upstream markets that are subject to regulation  by  the  Romanian
       telecommunication regulator ANCOM.

       |Table  - Vertically affected markets in Romania (I)                                                                                    |
|Wholesale regulated markets                                                                                                            |
|Upstream market                                               |Downstream market                                                       |
|Wholesale ULL         |DT 100%             |GTS               |International retail global    |DT [0-5]%            |GTS [0-5]%        |
|Regulated market      |                    |N/A               |telecommunications services    |                     |                  |
|                      |                    |                  |International wholesale for    |DT 0-5]%             |GTS [0-5]%        |
|                      |                    |                  |global telecommunications      |                     |                  |
|                      |                    |                  |services                       |                     |                  |
|                      |                    |                  |Retail business connectivity   |DT [20-30]%          |GTS [0-5]%        |
|                      |                    |                  |services                       |                     |                  |
|                      |                    |                  |Retail supply of fixed voice   |DT [70-80]%          |GTS [0-5]%        |
|                      |                    |                  |services                       |                     |                  |
|                      |                    |                  |Retail supply of fixed internet|DT [20-30]%          |GTS< [0-5]%       |
|                      |                    |                  |access services                |                     |                  |
|Wholesale market for  |DT [60-70]%         |GTS N/A           |Retail supply of fixed voice   |DT [70-80]%          |GTS [0-5]%        |
|call origination at a |                    |                  |services                       |                     |                  |
|fixed location        |                    |                  |                               |                     |                  |
|Regulated market until|                    |                  |                               |                     |                  |
|1 January 2015[234]   |                    |                  |                               |                     |                  |
|                      |                    |                  |End-to-end call services       |DT [10-20]%          |GTS [0-5]%        |
|Wholesale market for  |DT 100%             |GTS 100%          |International retail global    |DT [0-5]%            |GTS [0-5]%        |
|fixed call termination|                    |                  |telecommunications services    |                     |                  |
|services              |                    |                  |market                         |                     |                  |
|Regulated market      |                    |                  |                               |                     |                  |
|                      |                    |                  |International wholesale for    |DT 0-5]%             |GTS [0-5]%        |
|                      |                    |                  |global telecommunications      |                     |                  |
|                      |                    |                  |services                       |                     |                  |
|                      |                    |                  |Retail supply of fixed voice   |DT [70-80]%          |GTS [0-5]%        |
|                      |                    |                  |services                       |                     |                  |
|                      |                    |                  |Retail supply of mobile        |DT [10-20]%          |GTS N/A           |
|                      |                    |                  |telecommunication services     |                     |                  |
|                      |                    |                  |End-to-end call services       |DT [10-20]%          |GTS [0-5]%        |
|Wholesale market for  |DT -100%            |GTS -N/A          |International retail global    |DT [0-5]%            |GTS [0-5]%        |
|mobile call           |                    |                  |telecommunications services    |                     |                  |
|termination services  |                    |                  |market                         |                     |                  |
|Regulated market      |                    |                  |                               |                     |                  |
|                      |                    |                  |International wholesale for    |DT [0-5]%            |GTS [0-5]%        |
|                      |                    |                  |global telecommunications      |                     |                  |
|                      |                    |                  |services                       |                     |                  |
|                      |                    |                  |Retail supply of fixed voice   |DT [70-80]%          |GTS [0-5]%        |
|                      |                    |                  |services                       |                     |                  |
|                      |                    |                  |Retail supply of mobile        |DT [10-20]%          |GTS N/A           |
|                      |                    |                  |telecommunication services     |                     |                  |
|                      |                    |                  |End-to-end call services       |DT [10-20]%          |GTS [0-5]%        |
|Wholesale market for  |DT [60-70]%         |GTS [5-10]%       |International retail global    |DT [0-5]%            |GTS [0-5]%        |
|domestic call transit |                    |                  |telecommunications services    |                     |                  |
|services              |                    |                  |                               |                     |                  |
|Regulated market      |                    |                  |                               |                     |                  |
|                      |                    |                  |International wholesale for    |DT [0-5]%            |GTS [0-5]%        |
|                      |                    |                  |global telecommunications      |                     |                  |
|                      |                    |                  |services                       |                     |                  |
|                      |                    |                  |Retail supply of fixed voice   |DT [70-80]%          |GTS [0-5]%        |
|                      |                    |                  |services                       |                     |                  |
|                      |                    |                  |Retail supply of mobile        |DT [10-20]%          |GTS N/A           |
|                      |                    |                  |telecommunication services     |                     |                  |
|                      |                    |                  |End-to-end call services       |DT [10-20]%          |GTS [0-5]%        |

  375) As can be seen from the table above, the upstream markets for wholesale ULL[235], wholesale provision of fixed call  termination  services
       and wholesale provision of mobile termination services[236] and several downstream markets  are  vertically  affected.  However,  a  large
       number of these markets is affected only on a technical basis ("one net, one market"). Moreover, because of their specific  nature,  these
       markets are regulated: this means that the national regulator, the National Regulatory Authority ANCOM has imposed on DT obligations  with
       regard to transparency, equal treatment, accounting separation, access and interconnection related obligations as well as  cost-based  and
       controllable prices. These obligations will continue to apply to the merged entity.

  376) Moreover on the wholesale market for domestic call transit services[237] (DT [60-70]% and GTS CE [5-10]%), DT's activities are  regulated.
       The regulation, as stated above, includes transparency remedies, non-discrimination, accounting separation,  tariffs  control  and  access
       obligations. These obligations will continue to apply to the merged entity.

  377) For these reasons, the Commission considers that no competition concerns relating to the relevant downstream markets[238] will arise.

  378)   As regards the upstream market for call origination at a fixed location (where only DT is active), this market  has  been  recently  de-
       regulated by ANCOM[239], with a one-year transition period running until 2015 for the withdrawal of the obligations previously imposed  on
       DT.[240] ANCOM has found this market to be competitive.

  379)   This market is vertically related to the downstream markets for retail supply  of  fixed  voice  services  (DT  [70-80]%,  GTS  [0-5]%).
       However, any possible risk of foreclosure can be excluded. First, as GTS CE is not active on the wholesale market  for  call  origination,
       DT's power on the upstream market will not increase post-transaction. Second, as confirmed by ANCOM, five alternative  suppliers  of  call
       origination services are present in this upstream market (including Vodafone, Orange, UPC and RCS&RDS). Third, the increment brought about
       by the transaction in the retail market for the supply of fixed voice  services  is  insignificant  ([0-5]%).  The  same  applies  to  the
       vertically affected downstream market for end-to-end calls where the Parties' combined market share is [10-20]% and the increment  brought
       by the transaction is [0-5]%.

  380) The following table presents other vertically affected markets that do not give rise to competition concerns as the Parties' market shares
       are low or the increment is insignificant.

       |Table  - Vertically affected markets in Romania (II)                                                                                 |
|Other vertically related markets not giving rise to competition concerns                                                             |
|Upstream market                                             |Downstream market                                                        |
|Wholesale internet|DT                   |GTS                |Retail business connectivity       |DT [20-30]%        |GTS 0-5]%        |
|connectivity      |[0-5]%               |N/A                |services                           |                   |                 |
|Wholesale leased  |DT                   |GTS                |International retail global        |DT 0-5]%           |GTS 0-5]%        |
|lines             |[20-30]%             |[10-20]%           |telecommunications services        |                   |                 |
|                                                            |International wholesale for global |DT 0-5]%           |GTS 0-5]%        |
|                                                            |telecommunications services        |                   |                 |
|Wholesale          |DT [10-20]%           |GTS 0-5]%        |Retail supply of fixed voice       |DT [70-80]%        |GTS 0-5]%        |
|end-to-end call    |                      |                 |services                           |                   |                 |
|services           |                      |                 |                                   |                   |                 |
|Wholesale          |DT                    |GTS              |International retail global        |DT 0-5]%           |GTS 0-5]%        |
|termination and    |[Not available]       |N/A              |telecommunications services        |                   |                 |
|hosting of         |                      |                 |                                   |                   |                 |
|non-geographic     |                      |                 |                                   |                   |                 |
|numbers services   |                      |                 |                                   |                   |                 |
|                   |                      |                 |International wholesale for global |DT 0-5]%           |GTS 0-5]%        |
|                   |                      |                 |telecommunications services        |                   |                 |
|                   |                      |                 |Retail supply of fixed voice       |DT [70-80]%        |GTS 0-5]%        |
|                   |                      |                 |services                           |                   |                 |

  381)   As regards the vertical relationship between the international market for retail of GTS, (downstream from  the  wholesale  leased  lines
       market and wholesale termination and hosting of non-geographical numbers),  the  proposed  transaction  will  not  raise  any  competition
       concerns. First, there will not be any ability of the merged entity to foreclose competitors as the market shares of the Parties (alone or
       combined) in either the upstream or the downstream market are limited ([0-5]%). Therefore, any foreclosure strategy would not succeed. The
       same considerations apply to the international wholesale market for GTS (downstream  from  the  wholesale  leased  lines  market  and  the
       wholesale market for termination and hosting of non-geographical numbers) as well as to the wholesale  market  for  internet  connectivity
       (upstream from the retail business connectivity market).

  382)   As regards the vertical relationship between the wholesale market for termination and  hosting  of  non-geographical  numbers  (DT  [not
       available][241]) that is upstream from the retail market for the supply of fixed voice  services  (DT:  [70-80]%,  GTS  CE:  [0-5]%),  the
       proposed transaction will not raise any competition concerns. The Commission considers that a foreclosure  strategy  is  unlikely  as  the
       increment brought about by the transaction in the retail market for the supply of fixed voice services is insignificant ([0-5]%)  and  GTS
       CE is not active in the upstream market.

  383)   Finally, concerning the vertical relation between the wholesale market for end-to-end call services (DT[242] [10-20]%,  GTS  CE  [0-5]%)
       that is upstream from the market for retail supply of fixed voice services (DT [70-80]%, GTS CE [0-5]%),  the  Commission  considers  that
       competition concerns are unlikely to arise.

  384)   The Commission considers that concerns related to input foreclosure can be excluded as the  Parties'  combined  share  on  the  upstream
       market remains relatively low.[243] Other strong suppliers of end-to-end call services such as Euroweb ([20-30]%), Prime Telecom ([10-20]%
       and UPC ([10-20]%) are present on the upstream market.

  385)   Moreover, the Commission considers that concerns related to customer foreclosure can be excluded as the incremental market share of  GTS
       CE in the downstream retail market ([0-5] %) is insignificant and the competitive situation on the retail market will  remain  practically
       unchanged.

3 The Czech Republic

1 Parties' activities

  386) In the Czech Republic GTS CE is active through GTS Czech, which is a nationwide telecommunications operator and managed services provider.
       GTS Czech provides a complex portfolio of voice, data, hosting, Internet and ICT services.

  387) DT is active in the Czech Republic mainly as a nationwide mobile network operator, through its 61% majority shareholding in T-Mobile Czech
       Republic a. s (“TMCZ”). In addition, DT provides telecommunication services to Czech retail and business customers directly or  indirectly
       through its wholly-owned subsidiary T-Systems Czech Republic a. s. (“TSCZ”). DT also provides data services, such as  IP  VPN  and  server
       hosting (web, mail, Domain Name Servers). DT Group’s presence in the Czech fixed telecommunications services markets is limited.[244]

2 Horizontal overlaps

  388) In the Czech Republic, the proposed transaction gives rise  to  the  following   horizontally  affected  markets  :  (i)  retail  business
       connectivity; (ii) wholesale provision of domestic call transit services and (iii) retail bulk  SMS  and  (iv)  retail  supply  of  mobile
       telecommunications services[245] (See the table below).

       Table  - Horizontally affected markets in the Czech Republic

|Market/segment             |DT                     |GTS CE                |Combined share          |
|Retail business            |[5-10]%                |[10-20]%              |[20-30]%                |
|connectivity               |                       |                      |                        |
|Wholesale provision of     |[0-5]%                 |[30-40]%              |[30-40]%                |
|domestic call transit      |                       |                      |                        |
|services                   |                       |                      |                        |
|Retail bulk SMS            |[20-30]%               |[0-5]%                |[20-30]%                |

       Source: Parties' best estimates

1 Retail market for business connectivity

  389) The Parties estimate the size of the Czech business connectivity market to be EUR 207,4 million in 2012. [246]

  390) In the Czech Republic, both DT and GTS CE are active in the retail provision of business connectivity  services  to  large  corporate  and
       public sector customers. Market shares of the Parties in the Czech business connectivity market  and  its  possible  sub-segments  are  as
       follows:

       Table  - Market shares for the retail market for business connectivity and its segments

|Main Market                                                              |Possible sub-segments                                                 |
|Retail market for business connectivity                                  |Broadband access                                                      |
|                                                                         |Value:                                                                |
|                                                                         |DT: [0-5]%                                                            |
|                                                                         |GTS: [10-20]%                                                         |
|                                                                         |Combined:  [20-30]%                                                   |
|                                                                         |Leased lines                                                          |
|Value:                               |Volume:                            |Value:                                                                |
|DT: [5-10]%                          |DT: [0-5]%                         |DT: [0-5]%                                                            |
|GTS: [10-20]%                        |GTS: [5-10]%                       |GTS: [5-10]%                                                          |
|Combined: [20-30]%                   |Combined: [10-20]%                 |Combined: [10-20]%                                                    |
|                                     |                                   |VPN                                                                   |
|                                     |                                   |Value:                                                                |
|                                     |                                   |DT: [5-10]%                                                           |
|                                     |                                   |GTS: [10-20]%                                                         |
|                                     |                                   |Combined: [20-30]%                                                    |

  391) As can be seen from the table, the proposed transaction would give rise to horizontally affected markets (i) in  the  broader  market  for
       retail business connectivity as well as in the possible sub-segments for (ii) retail fixed broadband access to  large  business  customers
       and (iii) retail VPN. In contrast, the possible sub-market for retail leased lines, where the combined market share of the Parties is [10-
       20]% in value is not horizontally affected as the combined market share remains [10-20]% and, therefore, will not be analysed  further  on
       its own.

1 Parties’ view

  392) First, the Parties submit that DT has a limited presence on the overall market ([5-10]% in value) as well as the sub-segments.  Therefore,
       with the combined market share of the Parties just exceeding [20-30]%, the merged entity will not have a significant  market  share  post-
       transaction. In this context, they note that the Czech retail market for business connectivity is characterized by strong competition with
       Telefonica (approximately [60-70]%) being the market leader.

  393) Second, the Parties submit that significant price decline has occurred on this market.

  394) Third, the Parties submit that DT and GTS are not close competitors.

  395) Finally, they submit that the retail market for business connectivity is highly contestable, due to  the  rise  of  IP  VPN  and  Ethernet
       technologies, which would lower barriers to entry since there would not be any substantial need for investment in infrastructure.

2 Commission's assessment

  396) The Commission considers that the horizontal overlap in the market for business connectivity does not lead to  any  competitive  concerns,
       for the following reasons.

  397) First, no respondent to the market investigation raised any concern related to the impact of the proposed transaction with respect to  the
       market for retail business connectivity in the Czech Republic.

  398) Second, the Parties' combined market share is [20-30]% in most possible markets and [20-30]% in the possible sub-segment for VPN services.
       Furthermore, the increment is relatively small and [5-10]% in all possible markets. Second, the Parties face important competitors in this
       market, primarily from Telefónica with a [60-70]% market share on the overall market. Other competitors include UPC Czech  Republic  (with
       approximately [5-10]% market share), Ceske Radiokomunikace (with approximately [0-5]% market  share)  and  CD-Telematika  (approx.  [0-5]%
       market shares).[247] These companies are active in each of the affected sub-markets.

  399) Considering all the above and the other available evidence, the Commission concludes that the proposed transaction does not raise  serious
       doubts as to its compatibility with the internal market on the market for retail business  connectivity  and  any  of  its  possible  sub-
       segments, in the Czech Republic.

2 Wholesale of domestic call transit services market

  400) The Parties estimate the size of the market to be EUR 21,2 million in 2012.

  401) In the wholesale domestic call transit services market, the Parties' combined market share amounts to [30-40]%[248],  and  the  respective
       increment is [0-5]%.

1 Parties’ view

  402) First the Parties submit that, due to DT's limited market presence (turnover of approximately EUR […]), the proposed transaction will  not
       have a significant impact on the competitive situation of this market.

  403) Second, the Parties submit that this market is highly competitive. Other players active would be Telefónica (approximately  [20-30]%)  and
       Dial Telecom (approximately [10-20]%). Moreover, this market would be highly contestable due to the low barriers  to  entry:  indeed,  the
       advent of VoIP and the consequent substitution of cheaper IP interconnection solutions rather than  traditional  legacy  transit  services
       would explain the declining trend of this market both in volume and in revenue. In  addition,  customers  could  easily  switch  from  one
       provider of call transit to another.

  404) Finally, the regulation of the wholesale market for fixed call termination[249], which imposes access and interconnection  obligations  as
       well as price caps on SMP terminating carriers, would render direct interconnection to such carriers'  network  a  partial  substitute  to
       domestic call transit services.

2 Results of the market investigation

  405) The market investigation gave indications that GTS CE's market share could be higher than what was submitted by the Parties.  However,  it
       also confirmed that DT's presence on this market would be negligible.[250]

  406) Likewise, the market investigation confirmed the existence of alternative providers of  domestic  call  transit  services,  such  as  Dial
       Telecom, CD-Telematika, BT and Telefonica.

  407) In addition, the majority of providers of wholesale call transit services have considered that incentives to  enter  the  market  are  low
       because of low margins and, as for small operators, that entry barriers are high given that interconnection costs are high.[251]

  408) Finally, the market investigation confirmed that the wholesale market for fixed call termination is regulated.

3 Commission's assessment

  409) The Commission considers that the horizontal overlap in the market for wholesale call transit services does not lead  to  any  competitive
       concerns, for the reasons laid down below.

  410) First, the market is competitive and the Parties  (with  a  share  of  [30-40]%)  will  face,  post-transaction,  significant  competitive
       constraint from players such as Telefonica (approximately [20-30]%), Dial Telecom (approximately  [10-20]%  market  shares),  BT  and  CD-
       Telematika.

  411) Second, the increment brought about by the merger is negligible and in any case [0-5]%. DT is active in this market to  a  highly  limited
       extent, with total annual revenues of only EUR […].

  412) Lastly, even if the market for wholesale  call  transit  services  is  not  regulated  as  such,  the  Commission  considers  that  direct
       interconnection agreements with the terminating carrier's network may  partially  substitute  the  need  to  purchase  separately  transit
       services. Alternatively, demand for transit services coming from small voice providers, for which direct interconnection  costs  would  be
       too high, could be served either by (i) already existing transit carriers or (ii) by new entrants, which could aggregate such  demand  and
       would have sufficient scale to commit to direct interconnection agreements.

  413) Considering all the above and the other available evidence, the Commission concludes that the proposed transaction does not raise  serious
       doubts as to its compatibility with the internal market on the market for domestic call transit services in the Czech Republic.

       3 Retail bulk of SMS

  414) The Parties estimate the size of the Czech market for retail bulk SMS services to be EUR 24,6 million in 2012.

  415) In this market, DT has a market share of [20-30]% (both in value and volume) and GTS CE's share amounts to [0-5]% in value and  [0-5]%  in
       volume The combined share therefore amounts to [20-30]% in value and [20-30]% in volume.

1 Parties’ view

  416) First, the Parties submit that this market is highly competitive and that they face competition from Telefónica and Vodafone, as  well  as
       from international players, in particular global SMS providers.[252]

  417) Second, the Parties also submit that the market is characterised by low entry barriers. According to  them,  the  provision  of  bulk  SMS
       gateways does not require investments into physical network infrastructure, but can be provided on software and server basis  and  on  the
       basis of (international) agreements with MNOs.

  418) In addition, the Parties submit that this overlap is merely technical since GTS CE operates no mobile network itself.  It  therefore  does
       not generate turnover from terminating bulk SMS. Rather, GTS CE acts as an intermediary, bundling its customers’ demand for  SMS  services
       and purchasing SMS messages in bulk from SMS termination suppliers such as DT. The service would be similar to domestic call transit,  but
       for SMS.

       2 Commission's assessment

  419) First, no respondent to the market investigation raised any concern related to the impact of the proposed transaction with respect to  the
       market for retail bulk SMS services in the Czech Republic.

  420) Second, the Commission considers that the Parties' combined market share by value of approximately [20-30]% is not significant.

  421) Third, post-transaction, the Parties will still face strong  competition  from  alternative  providers  of  bulk  SMS  services,  such  as
       Telefónica (with a market share of approximately [40-50]%) and Vodafone (with a market share of approximately [20-30]%).

  422) Fourth, the proposed transaction leads to a limited increment (GTS CE's market is [0-5]% by value) so that the proposed  transaction  will
       not introduce a significant change in the competitive situation of the market.

  423) Considering all the above and the other available evidence, the Commission concludes that the proposed transaction does not raise  serious
       doubts as to its compatibility with the internal market on the market for retail bulk SMS services in the Czech Republic.

3 Vertical overlaps

  424) As to vertical relationships, the Parties' activities overlap in a large number of markets, leading  to  vertically  affected  markets  as
       listed in the tables below. Table 15 shows the markets which are regulated by the Czech telecommunication authority  and  where,  for  the
       reasons explained further below, competitive concerns can be excluded. Table 16 illustrates the markets where the Parties' combined market
       shares are limited or de minimis. The change brought about by the transaction is insignificant and,  for  the  reasons  explained  further
       below, competition concerns are unlikely to arise. Finally, Table 17 shows the vertically affected markets where a competitive  assessment
       has been undertaken.

       1 Wholesale regulated markets

                                                       Table  - Wholesale regulated markets

|Upstream market                                                        |Downstream market                                                     |
|                                          |DT           |GTS CE        |                                       |DT            |GTS CE         |
|Wholesale provision of fixed call         |100%         |100%          |Retail Global telecommunication        |[0-5]%        |[0-5]%         |
|termination services                      |             |              |services                               |              |               |
|Regulated market                          |             |              |                                       |              |               |
|                                          |             |              |                                       |              |               |
|                                          |             |              |Wholesale market for global            |[0-5]%        |[0-5]%         |
|                                          |             |              |telecommunications services            |              |               |
|                                          |             |              |Retail supply of fixed voice services  |[0-5]%        |[5-10]%        |
|                                          |             |              |Retail supply of mobile                |[30-40]%      |[0-5]%         |
|                                          |             |              |telecommunication services to end      |              |               |
|                                          |             |              |customers                              |              |               |
|                                          |             |              |Wholesale market for end-to-end calls  |[N/A]         |<[20-30]%      |
|Wholesale provision of mobile termination |100%         |[N/A]         |Retail Global telecommunication        |[0-5]%        |[0-5]%         |
|services                                  |             |              |services                               |              |               |
|Regulated market                          |             |              |                                       |              |               |
|                                          |             |              |                                       |              |               |
|                                          |             |              |                                       |              |               |
|                                          |             |              |Wholesale market for global            |[0-5]%        |[0-5]%         |
|                                          |             |              |telecommunications services            |              |               |
|                                          |             |              |Retail supply of fixed voice services  |[0-5]%        |[5-10]%        |
|                                          |             |              |Retail supply of mobile                |[30-40]%      |[0-5]%         |
|                                          |             |              |telecommunications services to end     |              |               |
|                                          |             |              |customers                              |              |               |
|                                          |             |              |Retail bulk SMS services               |[20-30]%      |               |
|                                          |             |              |                                       |              |[0-5]%         |

  425) As illustrated by table 15 above, the upstream markets for the wholesale  provision  of  fixed  call  termination  services  and  for  the
       provision of mobile termination services (where both Parties are active and each of them has 100% market shares) overlap with a number  of
       downstream markets.[253]

  426) On the upstream markets, every operator has a market share of 100% based on a market definition which defines a separate market  for  each
       individual network (“one net – one market”). Because of their monopolistic intrinsic nature, these two upstream markets are  regulated  in
       the Czech Republic. This means, notably, that every provider of such services is subject to transparency,  non-discrimination,  accounting
       separation, tariffs control and access obligations.[254]

  427) The Commission considers that the Parties are prevented from engaging in an effective foreclosure strategy with respect to termination  of
       fixed or mobile calls. Given the regulation of the upstream markets, (i) the merged entity will not have  the  ability  to  foreclose  any
       downstream competitors by withholding its input services (due to access and interconnection obligations); (ii) the merged entity will  not
       have the incentive to foreclose upstream competitors by recouping losses through an increase in prices upstream given that the latter  are
       regulated (in the form of cost-based and controllable price obligations). In this respect, the Commission notes  that  its  recommendation
       from 7 May 2009 aims at harmonising how the cost-orientation should be applied in the case of mobile and fixed termination rates.[255]

  428) Second, as regards the downstream markets where the Parties overlap, the Commission notes that the Parties' combined market share is  non-
       significant, and that the increment is [5-10]%. The Commission considers that the limited increment in market share would  unlikely  allow
       the merged entity to engage in a foreclosure strategy.

  429) Third, in the case of the downstream market for the retail supply of mobile telecommunications services to end customers, GTS  CE  is  not
       active on this market. On the wholesale market for end-to-end calls, DT is not active. Therefore, the proposed transaction does  not  lead
       to any change on those markets.

  430) Fourth, no respondent to the market investigation raised any concern related to the impact of the proposed transaction with respect to the
       vertically related markets for the wholesale provision of fixed call termination services and for  the  provision  of  mobile  termination
       services and the downstream markets mentioned in footnote 253 above, in the Czech Republic.

  431) For the above reasons, the Commission concludes that the proposed transaction does not raise serious doubts as to its  compatibility  with
       the internal market with respect to the vertical relationships between the markets for the wholesale provision of fixed  call  termination
       services and for the provision of mobile termination services on the one hand, and the downstream markets mentioned in footnote 253  above
       on the other hand, in the Czech Republic.

2 Wholesale leased lines market - retail supply of mobile telecommunication services to end customers

  432) The upstream market of wholesale leased lines is vertically related to the downstream market of retail supply of mobile  telecommunication
       services to end customers (where DT's market share amounts to [30-40]%).

  433) As can be seen from the table below, even under the narrowest market definition, the Parties' combined  market  share  upstream  does  not
       exceed [5-10]%, with an increment no larger than [0-5]%.

       Table  - Market shares Wholesale leased lines market - retail supply of mobile telecommunication services to end customers

|Upstream market                                       |Downstream market                                                   |
|                          |DT           |GTS CE       |                                      |DT           |GTS CE         |
|Wholesale leased lines    |[0-5]%       |[5-10]%      |Retail supply of mobile               |[30-40]%     |[0-5]%         |
|                          |             |             |telecommunication services to end     |             |               |
|                          |             |             |customers                             |             |               |
|Terminating segment       |[0-5]%       |[5-10]%      |                                      |             |               |
|Trunk segment             |[0-5]%       |[5-10]%      |                                      |             |               |

       1 Parties’ view

  434) First, the Parties submit that this vertical relationship will not give rise to any foreclosure  concerns  given  that  DT  could  not  be
       considered an important customer. In 2013, DT sourced leased lines from GTS CE only to a limited extent (EUR […]).

  435) Second, the Parties submit that GTS CE's limited market share in the Czech wholesale market for leased lines excludes any  risk  of  input
       foreclosure. The Parties' competitors in retail mobile services will be able to source their demand  of  wholesale  leased  lines  from  a
       number of carriers on the market after implementation of the proposed concentration.

2 Commission's assessment

  436) The Commission considers that the merged entity will not have the ability to engage in a foreclosure strategy for the following reasons.

  437) No respondent to the market investigation raised any concern related to the impact  of  the  proposed  transaction  with  respect  to  the
       vertical relationship between the markets for wholesale leased lines and for the retail provision of mobile telecommunications services in
       the Czech Republic.

  438) With respect to input foreclosure, the Parties' combined market share upstream is limited. Therefore, the merged entity does not have  the
       ability to successful foreclose its downstream competitors.

  439) With respect to customer foreclosure, GTS CE's activities are negligible on the downstream market so that there is practically  no  change
       on the downstream market.  Second,  DT's  market  presence  downstream  is  limited  to  [30-40]%  and  alternative  retailers  of  mobile
       telecommunications services will continue to be active on this market, namely Telefónica ([30-40]%) and Vodafone ([20-30]%).

  440) Third, even if DT were able to exert market power in the retail market for mobile telecommunications services to  foreclose  its  upstream
       competitors, there are alternative customers of wholesale leased lines such as retailers of business connectivity or retailers of GTS.

  441) Considering all the above and the other available evidence, the Commission concludes that the proposed transaction does not raise  serious
       doubts as to its compatibility with the internal market with respect to the vertical relationship between the markets for wholesale leased
       lines and for the retail provision of mobile telecommunications services in the Czech Republic.

3 Markets vertically related to the wholesale market for domestic call transit services

  442) The upstream market for the wholesale provision of domestic call transit services on fixed networks (where GTS CE's upstream market  share
       is [30-40]%) is vertically related to the downstream markets for (i) retail GTS, (ii) wholesale international  carrier  services  and  for
       (iii) retail supply of fixed voice services (where the Parties' combined market share is limited and in any case [5-10]%).

      Table  - Market shares for the wholesale market for domestic call transit services and related downstream markets

|Upstream market                                           |Downstream market                                               |
|Wholesale provision of domestic call |[0-5]%    |[30-40]%  |Retail Global telecommunication    |[0-5]%      |[0-5]%         |
|transit services on fixed networks   |          |          |services                           |            |               |
|                                     |          |          |Wholesale market for global        |[0-5]%      |[0-5]%         |
|                                     |          |          |telecommunications services        |            |               |
|                                     |          |          |Lease of transmission capacity     |[0-5]%      |[0-5]%         |
|                                     |          |          |Carrier services                   |[0-5]%      |[0-5]%         |
|                                     |          |          |Retail supply of fixed voice       |[0-5]%      |[5-10]%        |
|                                     |          |          |services                           |            |               |

1 Parties’ view

  443) As explained in more detail in section 5.3.2.2.1 above, the Parties submit that the  upstream  market  for  domestic  call  transit  is  a
       competitive market. Furthermore, they submit that alternative providers of wholesale domestic call transit  such  as  Telefonica  or  Dial
       Telecom will exert competitive pressure on the merged entity post-transaction.

       2 Commission's assessment

  444) The Commission considers that the merged entity will not have the ability to foreclose its downstream competitors using  its  position  on
       the upstream market for the following reasons.

  445) First, no respondent to the market investigation raised any concern related to the impact of the proposed transaction with respect to  the
       vertical relationships between the market for wholesale domestic call transit services on the one hand, and (i) the retail market for GTS,
       (ii) the wholesale market for GTS and (iii) the retail market for the supply of fixed voice services in the Czech Republic  on  the  other
       hand.

  446) Second, the merged entity could not exert competitive power on the upstream market for wholesale supply of domestic call  transit  due  to
       the presence of alternative providers, such as BT ([20-30]%), Dial Telecom ([10-20]%) and Telefonica ([0-5]%).[256]

  447) Third, given the negligible combined market shares  of  the  Parties  in  the  downstream  market  for  (i)  retail  GTS,  (ii)  wholesale
       international carrier services and (iii) retail fixed voice services, any input foreclosure strategy would likely not prove profitable for
       the merged entity.

  448) Considering the above and the other available evidence, the Commission concludes that the proposed  transaction  does  not  raise  serious
       doubts as to its compatibility with the internal market with respect to the  vertical  relationships  between  the  market  for  wholesale
       domestic call transit services on the one hand, and (i) the retail market for GTS, (ii) the wholesale market for GTS and (iii) the  retail
       market for the supply of fixed voice services in the Czech Republic on the other hand.

       4 Vertical relationship between wholesale provision of domestic call transit services on fixed network and retail supply of mobile
       telecommunication services

  449) In the Czech Republic, the upstream market for the wholesale provision of domestic call transit services on fixed networks (GTS  CE:  [30-
       40]%, DT: [0-5]%) and the downstream market for the retail supply of mobile telecommunication services to end customers (DT: [30-40]%) are
       vertically affected.

      Table  - Market shares wholesale provision of domestic call transit services on fixed network and retail supply of mobile telecommunication
      services

|Upstream market                                               |Downstream market                                            |
|                                   |DT          |GTS CE        |                               |DT            |GTS CE         |
|Wholesale provision of domestic    |[0-5]%      |[30-40]%      |Retail supply of mobile        |[30-40]%      |[0-5]%         |
|call transit services on fixed     |            |              |telecommunication services to  |              |               |
|networks                           |            |              |end customers                  |              |               |

       1 Parties’ view

  450) The Parties submit that this vertical link will not lead to any competition concerns for the reasons set out below.

  451) First, the Parties submit that the regulation of the wholesale market for fixed call  termination  services[257]  has  an  impact  on  the
       wholesale market for domestic call transit services. This would ensure that calls of other operators can directly  interconnect  with  the
       terminating carrier's network and, therefore, could be considered as a partial substitute to domestic call transit services.

  452) Second, as explained in further detail in section 5.3.2.2.1 above, the Parties submit that the upstream market for domestic  call  transit
       services is competitive as GTS CE faces strong competition from, amongst others, Telefónica and DialTelecom.

  453) Third, the Parties submit that domestic call transit services are not an essential input for MNOs since most operators of size do not rely
       on transit services in order to provide retail voice services. Due to their  higher  volume  of  minutes  generated,  they  are  generally
       directly interconnected with other networks through their own infrastructure. Moreover, they submit that since MVNOs rely on their hosting
       MNOs network, this vertical link would not affect them directly.

  454) Finally, the Parties also submit that the merged entity would have no incentive to engage in input  foreclosure  as  the  costs  for  call
       transit services represent a rather marginal factor (approximately 5%) relative to the overall costs of providing downstream retail mobile
       telecommunication services.

  455) As to customer foreclosure, the Parties  submit  that  the  Czech  retail  market  for  the  provision  of  mobile  telecommunications  is
       characterised by intense competition from Telefónica ([30-40]%) and Vodafone ([20-30]%).

2 Results of the market investigation

  456) First, as mentioned in paragraph (405), the market investigation pointed towards higher upstream market shares for GTS  CE  but  confirmed
       the very limited presence of DT.

  457) Second, the market investigation gave indications that the market for domestic call transit is competitive with 17 companies operating  in
       the Czech Republic.[258] In turn, the market investigation further indicated that GTS CE's market shares have decreased significantly from
       2010 to 2012 due to the competitive pressure exerted by other players in the market.[259]

  458) Third, the market investigation gave indications that the regulatory framework of the wholesale market for fixed  call  termination  could
       lower entry barriers for the domestic call transit market.[260]

  459) Fourth, the majority of customers of call transit services (retailers of mobile telecommunication services) considered that  (i)  domestic
       call transit services are not an essential input for the retail  supply  of  mobile  telecommunications[261];  and  that  (ii)  there  are
       alternative suppliers.[262] In addition, the market investigation indicated that,  for  large  network  operators,  call  transit  can  be
       replaced by direct interconnections with the terminating carrier's network.[263]

  460) Fifth, none of the suppliers of call transit services responding to the market investigation  was  concerned  by  a  customer  foreclosure
       scenario. Finally, the market investigation indicated that there would be other customers to which they could supply domestic call transit
       services.[264]

3 Commission's assessment

  461) The Commission considers that the merged entity will not have the ability to engage on any input foreclosure for the following reasons.

  462) First, the market investigation confirmed that domestic call transit services is not  an  essential  input  for  providing  retail  mobile
       telecommunications services in the Czech Republic.

  463) Second, retailers of mobile services can rely on domestic call transit services offered by other upstream providers such as BT ([20-30]%),
       Dial Telecom ([10-20]%) and Telefonica ([0-5]%). Competition on the upstream market is further illustrated  by  the  fact  that  GTS  CE's
       market shares have been decreasing significantly due to competitive pressure exerted by other call transit providers.

  464) Third, alternatively, retailers of mobile telecommunications services can replace the need for domestic call transit  services  by  direct
       interconnection agreements with the terminating carrier's network.

  465) As to customer foreclosure, the Commission considers that the merged entity would not have the ability to engage in such a strategy. Since
       DT has direct interconnection agreements with the other carriers' networks, it could not be considered an essential customer  of  domestic
       call transit services.[265] Moreover, alternative customers of  call  transit  service  that  are  active  either  on  the  retail  mobile
       telecommunications services market or on the retail fixed voice services market, will remain present, post-transaction.

  466) In light of the above, the Commission concludes that the proposed transaction does not raise serious doubts as to its  compatibility  with
       the internal market with respect to the vertical relationship between the markets for wholesale call transit services and for  the  retail
       supply of mobile telecommunications services to end customers, in the Czech Republic.

       5 Market for wholesale access and call origination on mobile networks – Market for the retail supply of mobile telecommunications services

  467) On the downstream market for the retail supply of mobile telecommunications services, GTS CE acts  mainly  as  a  Mobile  Virtual  Network
       Enabling platform ("MVNE"), which is an intermediary (aggregator) between MNOs and small MVNOs, based on DT's upstream offer.  Since  mid-
       2013, GTS CE has been hosting approximately 30 small MVNOs.

  468) DT's market shares in the downstream market for retail mobile telecommunications services amount to [30-40]% and its main  competitors  on
       the downstream market are Telefónica (approximately [30-40]%) and Vodafone (approximately [20-30]%).[266]

       Table  - Market shares Access and call origination and retail supply of mobile telecommunication services

|Upstream market                                                    |Downstream market                                          |
|                                         |[10-20]%  |[5-10]%       |Retail supply of mobile        |[30-40]%   |[0-5]%         |
|Access and call origination              |          |              |telecommunications services to |           |               |
|                                         |          |              |end customers                  |           |               |
|                                         |          |              |                               |           |               |

1 Parties’ view

  469) The Parties submit that there will be no ability or incentive for input foreclosure for the following reasons.

  470) First, as to ability, the market for the wholesale access and call origination on mobile networks is characterized by intense  competition
       between the three major MNOs (DT, Telefónica and Vodafone) which would have a strong incentive to attract new MVNOs. This is supported  by
       significant entry of MVNOs since 2012 (around 50 new entrants).

  471) Second, even if the merged entity were to stop offering access and origination services post-merger, the Parties submit that  there  would
       be viable competitors, namely Vodafone or Telefónica that would be able and willing to offer such  services.  There  would  be  sufficient
       spare capacity in MNO's networks. Moreover, the large number of MVNOs that have entered the market  in  the  last  year  would  show  that
       competitors such as Telefónica or Vodafone are valid alternatives to supply MVNOs.

  472) As regards small MVNOs which may rely on MVNE services, the Parties submit that  other  MVNEs  such  as  Quadruple,  DH  Telecom  and  CD-
       Telematika (all operating on Vodafone's network) will continue to be active on this market. Moreover, switching MVNE  provider  is  rather
       fast and easy, in particular taking into account that the services provided by MVNEs are rather homogeneous and  contracts  are  of  short
       duration.

  473) Fourth, the Parties submit that MVNOs in the Czech Republic represent approximately 5% of the  overall  retail  mobile  telecommunications
       market.[267] Apart from the four largest Czech MVNOs, which account for a joint market share of  approximately  4%,  the  remaining  small
       MVNOs[268] only represent approximately 1% of the overall market for retail supply of  mobile  telecommunication  services  in  the  Czech
       Republic. Therefore, any input foreclosure strategy by the merged entity would not have any appreciable effect, even if the merged  entity
       hosted the largest MVNOs.

2 Results of the market investigation

  474) First, the market investigation confirmed the Parties' claims that there are  several  new  entrants  in  the  market  for  retail  mobile
       telecommunications services.[269] The Czech Regulator also confirmed that  there  are  several  MVNOs  in  all  of  the  three  main  MNOs
       networks.[270]

  475) Second, the market investigation confirmed that there are alternative suppliers of access and  call  origination  services,  namely  other
       MNOs.[271] As regards small MVNOs, the market investigation indicated that, in order to be hosted by a competing MNOs' network, MVNOs need
       to undertake commitments of a certain amount of traffic.[272] However, alternative MVNEs aggregating demand by small MVNOs  will  continue
       to offer similar services as GTS CE post-transaction, thus allowing entry of small MVNOs.[273]

  476) In addition, some respondents to the market investigation expressed concerns regarding a potential input foreclosure for small MVNOs.[274]

       3 Commission's assessment

  477) The Commission considers that the merged entity will not have the ability to engage in any input foreclosure strategy  for  the  following
       reasons.

  478) First, as regards the upstream market, alternative providers are active on this market such as Telefonica and Vodafone.

  479) Second, even if small MVNOs will not be able to be hosted directly on  competing  MNOs'  networks  due  to  their  inability  to  generate
       substantial traffic volume, alternative MVNEs such as Quadruple, DH Telecom and CD-Telematika will remain active on this market.[275]

  480) Third, MVNOs represent approximately 5% of the overall retail mobile telecommunications market[276] and therefore even if  some  of  these
       niche players were to exit the market in the future, this would not have any appreciable effects on competitive conditions  on  the  Czech
       market for mobile retail services.

  481) As regards customer foreclosure, currently DT does not depend on wholesale access and call origination services in order  to  provide  its
       retail mobile telecommunications services. Therefore, DT does not represent an important customer on this market.

  482) Given the above, the Commission concludes that the proposed transaction does not raise serious doubts as to  its  compatibility  with  the
       internal market with respect to the vertical relationship between the markets for wholesale access and call origination on mobile networks
       and retail supply of mobile telecommunications services in the Czech Republic.

6 Market for termination and hosting of non-geographic numbers – Market for retail supply of mobile telecommunications services

  483) In the Czech Republic, the proposed transaction leads to a vertical overlap between the Parties' activities in  the  upstream  market  for
       termination and hosting of non-geographic numbers (GTS CE: [not  available]  and  the  downstream  market  for  retail  supply  of  mobile
       telecommunication services (DT: [30-40]%, GTS CE: [0-5]%).

      Table  - Termination and hosting of non-geographic numbers and retail supply of mobile telecommunication services

|Upstream market                                                       |Downstream market                                         |
|Termination and hosting of  |Not active   |Not available[277]          |Retail supply of mobile     |[30-40]%     |[0-5]%         |
|non-geographic numbers      |             |                            |telecommunications services |             |               |
|                            |             |                            |to end customers            |             |               |

  484) On this market, companies providing a service over the phone are attributed by suppliers of  termination  and  hosting  of  non-geographic
       numbers with a special number (usually starting with 0800 for the Czech Republic) on which they can be  reached  by  callers.  Similar  to
       ordinary call termination services, calls to these numbers originate from a carrier's network and terminate on the network of the host  of
       such non-geographic number. However, contrary to ordinary calls to  geographic  numbers,  since  call  origination  and  call  termination
       regulation does not apply to these numbers, different revenue sharing agreements exist between (i)  the  originating  operator,  (ii)  the
       terminating operator and (iii) the company providing the service itself. Generally, in order to maximise revenue for the companies  active
       on those non-geographic numbers, such numbers are accessible by each and every caller.

1 Parties’ view

  485) The Parties submit that no input foreclosure concerns will arise for the following reasons.

  486) First, the price for the termination of calls to non-geographic numbers does not represent a significant cost factor relative to the price
       of the downstream retail mobile telecommunication services.

  487) Second, the termination of incoming calls will always be offered to competing carriers on the  downstream  level,  because  any  potential
       caller must be able to reach these services for this business to be viable for the carrier hosting it.

  488) Third, barriers to switching suppliers on this market are low and therefore, in case of a potential price increase by the  merged  entity,
       customers of non-geographic numbers (namely the companies offering those services over the phone) would be able to source from alternative
       providers.

  489) As to customer foreclosure, the Parties submit that DT is not an important customer of termination and hosting of  non-geographic  numbers
       services in the downstream market, in particular taking into account the large number of remaining customers. Thus, it could not foreclose
       competing providers upstream.

2 Results of the market investigation

  490) First, the majority of respondents to the market investigation indicated that GTS CE is a significant supplier of termination and  hosting
       of non-geographic numbers.[278] Second, the market investigation confirmed that other players are active on the upstream market, including
       Telefónica, Vodafone and Dial Telecom. Finally, the market investigation gave indications that it would be easy  to  switch  providers  of
       termination and hosting of non-geographic numbers.[279]

3 Commission's assessment

  491) The Commission considers that the merged entity will not have the ability to engage in any input foreclosure strategy  for  the  following
       reasons.

  492) First, the Commission considers that the merged entity will face competition from other upstream providers such  as  Telefónica,  Vodafone
       and Dial Telecom.

  493) Second, non-geographic numbers must be reached from each potential caller in order for the companies that are hosted on those  numbers  to
       run a successful business. Therefore, in the case that such numbers were not reachable from each potential caller due to a restriction  by
       the host carrier, the hosted companies would change host carrier. Furthermore, as switching provider is relatively  easy,  if  the  merged
       entity were to engage in an input foreclosure, companies providing their services on  non-geographic  numbers  would  simply  change  host
       carrier.

  494) As regards customer foreclosure, the Commission considers that the merged entity will not have the incentive to engage in such a strategy.
       In particular, if the Parties were to render non-geographic numbers hosted on competing networks unreachable for their  retail  customers,
       such customers would easily switch provider of retail mobile telecommunications services.

  495) Given the above, the Commission concludes that the proposed transaction does not raise serious doubts as to  its  compatibility  with  the
       internal market on the vertically affected markets for termination and hosting of non-geographic numbers and the market for retail  supply
       of mobile telecommunications services in the Czech Republic.

4 Conglomerate effects

1 Retail markets for fixed voice services and mobile telecommunications services

  496) In the Czech Republic, the Parties are active in fixed voice  services  (DT:  [0-5]%;  GTS  CE:  [5-10]%)  and  DT  is  active  in  mobile
       telecommunications services (DT: [30-40]%).

  497) The Parties' main competitors in the market for fixed voice services are Telefónica (approximately [70-80]%).

  498) DT's main competitors on the  market  for  mobile  telecommunications  services  are  Telefónica  (approximately  [30-40]%)  and  Vodafone
       (approximately [20-30]%).

  499) Two respondents to the market investigation raised concerns about a potential bundling between  the  mobile  and  fixed  services  in  the
       corporate customer segment.

1 Parties’ view

  500) The Parties submit that no conglomerate effects derive from the merger because, even if the merged entity would offer combined  fixed  and
       mobile services post-merger, this would not have an appreciable effect on competition. In particular, the Parties note the following.

  501) First both DT and GTS CE are small players in the market for retail supply of fixed voice services (DT: [0-5]%; GTS CE:  [5-10]%),  facing
       strong competition from Telefónica (approximately [70-80]%). There are numerous alternative operators that provide  fixed  voice  services
       using a range of other technologies, in particular UPC, which offers cable technology.

  502) Second, the retail mobile telecommunications market is characterised by intense competition between three network  operators  (Telefónica,
       Vodafone and DT) and more than 50 MVNOs. This is illustrated by the significant number of MVNOs entering the market in 2012.

  503) Third, the merger does not materially change DT's position in the retail markets for  the  supply  of  fixed  voice  services  and  mobile
       telecommunications services because GTS CE's share in these markets is rather small and therefore there would be  no  material  additional
       incentive for the merged entity to offer bundles.

  504) Fourth, several operators in the Czech republic offer combined fixed and mobile voice services and are well placed  to  compete  with  the
       merged entity. In particular, Telefónica would exercise a strong competitive constraint on the merged entity as it is  the  largest  fixed
       operator in the Czech Republic and one of the largest mobile operators. In addition, other fixed providers could also  easily  collaborate
       with mobile operators to offer combined services.

  505) Fifth, there is in any event no appreciable impact on competition since there is ever increasing competitive  pressure  by  the  so-called
       Over The Top (“OTT”) voice platforms[280] which aggressively market their VoIP services  for  both  mobile  and  fixed  networks  and  are
       therefore an alternative to business and residential customers.

2 Commission's assessment

  506) In the market for fixed voice services, the Parties' main competitor is Telefónica (approximately [70-80]%).

  507) In the market for the retail supply of mobile  telecommunications  services  to  end  customers,  DT  faces  competition  from  Telefónica
       (approximately [30-40]%) and Vodafone (approximately [20-30]%).

  508) The Commission considers that competition in the markets for mobile communications and fixed voice services would likely not  be  impacted
       if the merged entity started to bundle fixed and mobile voice services.

  509) First, given the very limited presence of GTS CE in the market for fixed voice services ([5-10]%) the merger would  have  a  very  limited
       incremental impact on DT's existing position.

  510) Second, DT is already – albeit to a limited extent – offering combined services, which shows it has pre-merger the ability to do so. [281]

  511) Third, other competitors currently offer combined fixed and voice services and would therefore be able to offer the same  combined  offers
       as the merged entity post-merger. Telefónica in particular, as the largest fixed operator  and  a  large  mobile  operator  in  the  Czech
       Republic, would be well placed to compete with the merged entity.

  512) Fourth, there appears to be little demand currently for bundled services. Moreover, even if there were an increase in customer demand  for
       combined offers that would make them unavoidable for a competitor to succeed in the market, other fixed providers could  collaborate  with
       other mobile operators to offer such solutions.

  513) Considering all the above and the other available evidence, the Commission concludes that the proposed transaction does not raise  serious
       doubts as to its compatibility with the internal market with respect to potential conglomerate effects on the  markets  for  retail  fixed
       voice services  and retail mobile telecommunications services in the Czech Republic.

   4 Poland

1 Parties' activities

  514) DT is active in Poland through T-Mobile Polska S.A., which is primarily active in mobile telecommunication services.[282] By contrast, GTS
       CE through GTS Poland supplies business connectivity services and wholesale telecommunication services. Therefore, overlaps in Poland  are
       limited and do not lead to any horizontally affected markets.

2 Vertical links

1 Wholesale regulated markets

  515) The Parties' activities are vertically related in several markets. However, some markets are regulated, as can be seen from the  following
       table.

                                                Table – Vertically affected markets in Poland (I)

                                                           Wholesale regulated markets

|Upstream markets                                            |Downstream markets                                           |
|                                |DT       |GTS CE          |                                   |DT          |GTS CE       |
|Wholesale provision of fixed    |100%     |100%            |Retail global telecommunications   |[0-5]%      |[0-5]%       |
|call termination services       |         |                |services                           |            |             |
|                                |         |                |Wholesale global telecommunications|[0-5]%      |[0-5]%       |
|                                |         |                |services                           |            |             |
|                                |         |                |Retail supply of fixed voice       |[0-5]%      |[0-5]%       |
|                                |         |                |services                           |            |             |
|                                |         |                |Retail supply of mobile            |[20-30]%    |[N/A]        |
|                                |         |                |telecommunication services to end  |            |             |
|                                |         |                |customers                          |            |             |
|Wholesale provision of mobile   |100%     |[N/A]           |Retail global telecommunications   |[0-5]%      |[0-5]%       |
|termination services            |         |                |services                           |            |             |
|                                |         |                |                                   |            |             |
|                                |         |                |                                   |            |             |
|                                |         |                |Wholesale global telecommunications|[0-5]%      |[0-5]%       |
|                                |         |                |services                           |            |             |
|                                |         |                |Retail supply of fixed voice       |[0-5]%      |[0-5]%       |
|                                |         |                |services                           |            |             |
|                                |         |                |Retail supply of mobile            |[20-30]%    |[N/A]        |
|                                |         |                |telecommunication services to end  |            |             |
|                                |         |                |customers                          |            |             |

       1 The Parties' view

  516) The Parties submit that in the wholesale markets for call termination in fixed and mobile networks, every operator has a market  share  of
       100%, based on a market definition limiting the product market to each individual network (“one net – one market”).

  517) In any case, the Parties submit that these vertical links will have no effects on competition, as  the  supply  relationship  between  the
       Parties is of no competitive relevance. While GTS CE is purchasing wholesale services from DT in Poland to an overall  amount  of  approx.
       EUR […],  and DT from GTS CE for ca. EUR […], the proposed transaction will not lead to any foreclosure scenarios.

2 The Commission's assessment

  518) The Commission considers that the proposed transaction does not lead to competition  concerns  arising  from  the  vertical  relationships
       involving fixed and mobile call termination services.

  519) First, while each of the Parties has a market share of 100% on the upstream markets (given that the market definition limits  the  product
       market to each individual network), the Polish telecommunication regulator has imposed regulatory  obligations  in  these  markets.  These
       obligations include access  obligations,  non-discrimination,  and  tariff  control.[283]  Furthermore,  the  Commission  notes  that  its
       recommendation from 7 May 2009 aims at harmonising how the cost-orientation should be applied in the case of mobile and fixed  termination
       rates.[284] Therefore, the Commission considers that the Parties are prevented from engaging in an  effective  foreclosure  strategy  with
       respect to termination of fixed or mobile calls.

  520) Second, as regards the downstream markets where the Parties overlap, the Commission notes that the Parties' combined market shares are [0-
       5]% with a small increment not higher than [0-5]%. In the case of the downstream market for the retail supply of mobile telecommunications
       services to end customers, DT market shares amount to [20-30]% but GTS CE is not active on this market. The Commission considers therefore
       that the limited or non-existent increments in market shares in the various downstream markets would unlikely allow the merged  entity  to
       engage in a foreclosure strategy.

  521) Third, no respondent to the market investigation raised any concern related to the impact of the proposed transaction with respect to  the
       market for the wholesale supply of mobile and fixed call termination services.

  522) For these reasons, the Commission concludes that the proposed concentration does not raise any competitive  concern  in  relation  to  the
       wholesale supply of mobile and fixed call termination services.

2 Market for termination and hosting of non-geographic numbers – Several vertically related downstream markets

  523) GTS CE but not DT[285] is active in the market for termination and hosting of non-geographic numbers. GTS CE's turnover  amounted  to  EUR
       […]. However, the Parties submit that they are unable to estimate GTS CE's market share due to a  lack  of  reliable  market  information.
       Therefore, assuming that the upstream market shares are above 30%, the vertical links will be analysed in the following section.

                                                Table – Vertically affected markets in Poland (II)

|Upstream markets                                          |Downstream markets                                              |
|                                |DT        |GTS CE        |                                     |DT          |GTS CE       |
|Wholesale market for termination|[N/A]     |Not available |Retail global telecommunications     |[0-5]%      |[0-5]%       |
|and hosting of non-geographic   |          |>30%          |services                             |            |             |
|numbers                         |          |              |                                     |            |             |
|                                |          |              |Wholesale global telecommunications  |[0-5]%      |[0-5]%       |
|                                |          |              |services                             |            |             |
|                                |          |              |Retail supply of fixed voice services|[0-5]%      |[0-5]%       |
|                                |          |              |Retail supply of mobile              |[20-30]%    |[N/A]        |
|                                |          |              |telecommunication services to end    |            |             |
|                                |          |              |customers                            |            |             |

   1 Parties' view

  524) The Parties submit that these vertical links will not lead to any input foreclosure by the merged entity on the downstream level.

  525) First, since DT is not active on this market in Poland, GTS CE's position in the upstream market and its market power will not change post-
       merger.

  526) Second, the costs for the termination of calls to non-geographic numbers do not represent a significant cost factor relative to the  price
       of the downstream retail voice services. Thus,  even  if  the  costs  for  the  termination  of  calls  to  special  rates  services  were
       hypothetically raised, this would not adversely affect prices for end-customers on the retail voice markets.

  527) Third, the Parties consider that the retail business of hosting of non-geographic numbers would not be viable without offering termination
       services to all carriers.

  528) Fourth, as “non-geographic numbers” are not tied to the geographic network of a certain provider, barriers to switching suppliers are low.
       If prices were increased, GTS CE's customers would be able to switch to alternative providers, thus  rendering  any  foreclosure  strategy
       ineffective.

  529) Regarding in particular the downstream market for mobile telecommunications services, the  Parties  submit  that  this  market  is  highly
       competitive due to the presence of seven mobile network operators[286] and effective national regulation.[287]  Parties  face  competition
       on this market from Orange (approximately [30-40]%), Polkomtel (approximately [20-30]%) and Play ([10-20]%).

  530) Regarding customer foreclosure, the Parties submit that DT’s limited presence is too low for DT to be regarded as an  important  customer.
       In addition, and in particular in the retail mobile telecommunications market, there is a large number of remaining customers.

2 Results of the market investigation with respect to the downstream market for the retail supply of mobile  telecommunication  services  to  end
                           customers

  531) As to a possible input foreclosure between the upstream market of termination and hosting of non-geographical numbers and  the  downstream
       market of retail mobile telecommunications services, the majority of respondents from the demand  side  considered  that  termination  and
       hosting of non-geographical numbers  services  constitute  a  critical  input  for  the  provision  of  retail  mobile  telecommunications
       services.[288]

  532) Second, the majority of the respondents to the market investigation considered GTS CE as a significant supplier  (representing  more  than
       50% of customers' total requirements).[289]

  533) Third, the majority of the respondents to the market investigation considered that there are  alternative  providers  of  termination  and
       hosting of non-geographic numbers.[290] They also confirmed that they multisource termination  and  hosting  of  non-geographical  numbers
       services.[291] The market investigation was inconclusive as to whether it would be profitable for the merged entity to stop supplying such
       services.[292]

  534) Finally, the majority of respondents from the demand side considered that the merger would not have any negative impact on the market  for
       retail mobile telecommunications services to end customers.[293]

3 Commission's assessment

  535) As can be seen from table 22 above, the increments brought  about  by  the  Transaction  in  the  downstream  markets  for  retail  global
       telecommunications services, for global telecommunications services and for retail supply of fixed voice  services  are  minimal  as  they
       remain [0-5]%. Given that the merged entity would represent such a small demand on the downstream markets, the Commission  considers  that
       the proposed transaction is unlikely to lead to any customer foreclosure.

  536) As regards a hypothetical strategy of input foreclosure regarding downstream markets for retail global  telecommunications  services,  for
       global telecommunications services and for retail supply of fixed voice services , the Commission notes that the proposed transaction does
       not increase the merged entity's ability to engage in such a strategy, since DT currently is not active in the upstream market.  Moreover,
       a number of fixed network providers are active on this market and offer services  for  call  termination  and  hosting  of  non-geographic
       numbers as part of their fixed and mobile retail voice business in Poland.

  537) As regards a hypothetical strategy of input foreclosure regarding downstream market of mobile telecommunication services to end customers,
       the Commission considers that the merged entity would have no ability to enter into an  input  foreclosure  strategy  in  the  market  for
       termination and hosting of non-geographic numbers, for the following reasons.

  538) Despite indicating that GTS CE is an important supplier, the market investigation confirmed that customers of call termination and hosting
       of non-geographic numbers services  could  procure  these  services  through  alternative  suppliers.  The  fact  that  they  multi-source
       additionally would render any attempt of foreclosure ineffective.

  539) Lastly, DT's market share on the market for retail supply of mobile telecommunications services equate [20-30]%.  Such  a  rather  limited
       market share[294] and the number of remaining players on this market[295] rule out any risk of customer foreclosure strategy.

  540) Considering all the above and the other available evidence, the Commission concludes that the proposed transaction does not raise  serious
       doubts as to its compatibility with the internal market with respect to the vertical relationships between the market for termination  and
       hosting of non-geographic numbers and the markets for GTS (both retail and wholesale), retail supply of fixed voice  services  and  retail
       supply of mobile telecommunication services to end customers.

       5 International market for Global Telecommunications Services

  541) Both DT (via its subsidiary T-Systems) and GTS CE provide end-to-end telecommunications services across national borders to  multinational
       corporations. The proposed transaction therefore results in a horizontal overlap on the market for  GTS  and  its  possible  sub-segments,
       although market shares are such that these markets are not affected.

  542) However, this section briefly discusses this market as one respondent to the market investigation submitted that the merged  entity  would
       gain a strong position in (wholesale) GTS in the Central and Eastern European region  (“CEE”)  through  the  acquisition  of  GTS  CE.  In
       particular, post-merger, GTS CE would be the only significant provider of cross-border leased lines in the CEE region that the  respondent
       described as an essential input for the supply of (retail) GTS through other providers that need to rent capacity on  cross-border  leased
       lines within the CEE region. Therefore, the merged entity would be able, post-transaction, to foreclose other (retail) GTS providers by no
       longer supplying or discriminating against them (for instance in terms of speed and prices).

  543) The Commission considers that this concern is unfounded for the following reasons.

  544) First, as discussed in section 4.1.1 above, the geographic scope of the market for GTS is global or at least EEA-wide. In such  a  market,
       the activities of the Parties are of limited magnitude and, on any possible market definition, they would have a combined market share [20-
       30]%. On the worldwide retail GTS market, the Parties had a combined market share of [0-5]% in 2012 and, at the  EEA-wide  level,  of  [5-
       10]%. On the possible market of wholesale GTS/ international carrier services, the Parties had a share of [0-5]% worldwide and around  [5-
       10]% at EEA-wide level. Second, a large number of competing carriers offer similar services as the  Parties  on  both  markets,  including
       global players such as TeliaSonera, Level3, Verizon, BT, AT&T, Orange, Telefonica, Telecom Italia, as well as  regional  players  such  as
       Interoute, PanTel (TurkTelecom), TelekomAustria (JetStream), and EUnetworks.

  545) Even if the market for retail GTS were to have a regional dimension, quod non, the Commission  considers  that  the  proposed  transaction
       would not significantly impede effective competition. On a possible market for retail GTS, the combined market share of the Parties at CEE
       level would not exceed [20-30]% (DT: [0-5]% GTS CE: [10-20]%).  Likewise,  on  a  possible  wholesale  market  for  international  carrier
       services, the combined market share of the Parties would amount to [20-30]% (DT: [5-10]%,  GTS  CE:  [10-20]%).  In  such  a  hypothetical
       market, a large number of competing carriers are active, amongst others Interoute (around [10-20]%),  Level3  (around  [10-20]%),  British
       Telecom (around [5-10]%) and Verizon (around [5-10]%).

  546) Considering all the above and the other available evidence, the Commission concludes that the proposed transaction does not raise  serious
       doubts as to its compatibility with the internal market on the possible markets for wholesale and retail GTS.

       CONCLUSION

  547) 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.

For the Commission
(Signed)
Joaquín ALMUNIA
Vice-President

-----------------------
[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 24, 29.1.2004, p. 1 (the "Merger Regulation").

[3]   As further explained in paragraph (5), DT does not acquire control over GTS' operations in Slovakia.

[4]   Although DT will initially acquire all Securities in Consortium 1 S.à r.l., the Parties have  unconditionally  and  in  a  legally  binding
manner agreed that the Slovakian Business is not part of the proposed concentration and, after acquisition of Consortium 1 S.à r.l.  by  DT,  the
Slovakian Business instantly will be sold and transferred back to an entity that will be set up by the Sellers.

[5]   Turnover calculated in accordance with Article 5(1) of the Merger Regulation and the  Commission  Consolidated  Jurisdictional  Notice  (OJ
C95, 16.04.2008, p1).

[6]   Commission decision of 28 June 2000 in case M.1741 – Verizon / MCI, recital 70.

[7]   Commission decision of 3 July 2012 in case M.6584 – Vodafone / Cable&Wireless, recital 33.

[8]   Commission decision of 3 July 2012 in case M.6584 – Vodafone / Cable&Wireless, recital 33.

[9]   Commission decision of 7 October 2005 in case M.3752 – Verizon / MCI, recital 55,  Commission,  Decision  of  25  January  2005,  Case  No.
COMP/M.3641 – BT/Infonet, recital 11, Commission, Decision of 28 June 2000, Case No. COMP/M.1741 – MCI WorldCom/Sprint,  recital  98,  Commission
decision of 3 July 2012 in case M.6584 – Vodafone / Cable&Wireless, recital 34.

[10]  Commission, Decision of 30 March 1999, Case No. IV/JV.15 – BT/AT&T, para. 89.

[11]  Commission decision of 28 June 2000 in case M.1741 – Verizon / MCI, recital 54.

[12]  Commission decision of 7 October 2005 in case M.3752 – Verizon / MCI, recital 24.

[13]  Commission decision of 7 October 2005 in case M.3752 – Verizon / MCI, recital 24.

[14]  Commission decision of 29 January 2010 in case M.5730 – Telefónica/Hansenet Telekommunikation, recital 6 and subsequent.

[15]  Retail broadband access to business customers with significant needs which require higher performance in terms of security,  bandwidth  and
functionality.

[16]  Leased lines are part-circuits that allow communication providers to connect their own networks  to  end  user  sites  for  the  supply  of
business connectivity (commission decision of 3 July 2012 in case M.6584 – Vodafone/Cable & Wireless, recital 28 and subsequent).

[17]  An encryption technology enabling to secure shared access as if it were a dedicated one.

[18]  See replies to Commission questionnaires Q3 Competitors – Retail Market for Business Connectivity Hungary of 13  March  2014,  question  18
and Q4 Competitors – Retail Market for Business Connectivity Romania of 13 March 2014, question 16.

[19]  See replies to Commission questionnaires Q5 Customers – Retail Market for Business Connectivity Hungary of 13 March 2014,  question  6  and
Q6 Customers – Retail Market for Business Connectivity Romania of 13 March 2014, question 6.

[20]  See replies to Commission questionnaires Q3 Competitors – Retail Market for Business Connectivity Hungary of 13  March  2014,  question  17
and Q4 Competitors – Retail Market for Business Connectivity Romania of 13 March 2014, question 15.

[21]  See replies to Commission questionnaires Q5 Customers – Retail Market for Business Connectivity Hungary, question  4  and  Q6  Customers  –
Retail Market for Business Connectivity Romania of 13 March 2014, question 4.

[22]  Commission decisions of 3 July 2012 in case M.6584 – Vodafone/Cable & Wireless, recital 10  and  of  29  January  2010  in  case  M.5730  -
Telefónica/Hansenet Telekommunikation, recital 28

[23]  See replies to Commission questionnaire Q3 Competitors – Retail Market for Business Connectivity Hungary of 13 March 2014, question 21  and
Q4 Competitors – Retail Market for Business Connectivity Romania of 13 March 2014, question 18.

[24]  See replies to Commission questionnaire Q5 Customers – Retail Market for Business Connectivity Hungary of 13 March 2014, question 9 and  to
Q6 Customers – Retail Market for Business Connectivity Romania of 13 March 2014, question 9.

[25]  Commission Recommendation of 17 December 2007 on  relevant  product  and  service  markets  within  the  electronic  communications  sector
susceptible to ex ante regulation in accordance with Directive 2002/21/EC of the European Parliament and of the Council on  a  common  regulatory
framework for electronic communications networks and services (OJ L 344, 28.12.2007, page 65).

[26]  Commission decision of 29 June 2009 in case COMP/M.5532 Carphone Warehouse/Tiscali UK, recitals 35 et seq.

[27]  Commission Decision of 20 September 2013 in case M.6990 – Vodafone/Kabel Deutschland, recital 131

[28]  See replies to Commission questionnaire Q15 to Retailer of fixed voice in Hungary of 20 March 2014, question 5.1 and 6.1.

[29]  See replies to Commission questionnaire Q15 to Retailer of fixed voice in Hungary of 20 March 2014, question 5.2 and 6.2.

[30]  Commission decision of 29 June 2009 in case COMP/M.5532 Carphone Warehouse/Tiscali UK, recital 56.

[31]  See replies to Commission questionnaire Q15 to Retailer of fixed voice in Hungary of 20 March 2014, question 11.

[32]  In this context "international calls" designate calls that are made by a domestic user when in his/her home country, but that terminate  at
destinations which are abroad, that means the receiving number is a foreign one.

[33]  Commission decision of 20 September 2013 in case M.6990 – Vodafone/Kabel Deutschland, recital. 209; Commission decision of 14 August  2013,
in case M.6956,– Telefónica/Caixabank/Banco Santander/JV, recital 52; Commission decision of 04  September  2012  in  case  M.6314  -  Telefónica
UK/Vodafone UK/Everything Everywhere/JV, recital 206; Commission decision of 3 July 2012, in case M.6584,– Vodafone/Cable & Wireless,  recital 35
et seq.; Commission Decision of 01 March 2010 in case M.5650,– T-Mobile/Orange, recital 20 et seqq.;  Commission  Decision  in  case  M.5730,  29
January 2010 – Telefónica/Hansenet, recital 18.

[34]  Commission Decision of 20 September 2013 in case M.6990 – Vodafone/Kabel Deutschland, recital 215.

[35]  See replies to Commission's questionnaire Q. 11 Retailers of mobile telecommunication services  Czech  Republic  and  Q.  12  Retailers  of
mobile telecommunication services - Hungary, question 4.

[36]  Commission Decision of 20 September 2013 in case M.6990,– Vodafone/Kabel Deutschland, recital 219; Commission Decision of  14  August  2013
in  case  M.6956,–  Telefónica/Caixabank/Banco  Santander/JV,  recital  54;  Commission  Decision  of  29   January   2010   in   case   M.5730,–
Telefónica/Hansenet, recital 28.

[37]   See replies to the Commission's questionnaire Q. 11 – Retailers of mobile telecommunication services Czech Republic, question 7 and Q.  12
– Retailers of mobile telecommunications services Hungary, question 15.

[38]  Case M.5730 – Telefónica/Hansenet Telekommunikation, paragraph 7.

[39]  Commission decision of 29 June 2009 in case COMP/M.5532 Carphone Warehouse/Tiscali UK, recitals 26 et seq.

[40]  Case M.5730 – Telefónica/Hansenet Telekommunikation, paragraph 8.

[41]  Commission decision of 29 June 2009 in case COMP/M.5532 Carphone Warehouse/Tiscali UK, recital 20.

[42]  Case M. 6990, 20 September 2013 – Vodafone/Kabel Deutschland, paragraph 195.

[43]  Case M.6314, 4 September 2012– Vodafone UK/Everything Everywhere/JV, paragraphs 183 et seq.

[44]  Case M.6314, 4 September 2012 – Telefónica UK/Vodafone UK/Everything Everywhere/JV, paragraphs 184 and 188.

[45]  Case M.6314, 4 September 2012 – Telefónica UK/Vodafone UK/Everything Everywhere/JV, paragraph 190.

[46]  http://www.acision.com/Products-and-Services/Services/Enterprise.aspx.

[47]  See http://www.mblox.com/company/overview.

[48]  http://www.hqsms.com/prices-coverage/price-list/czech-republic.

[49]  See http://www.tm4b.com/sending-sms/message_pricing/?ISO=CZ.

[50]  http://www.truesenses.com/website/pages/networklist.

[51]  http://www.bulksms.com/int/coverage/country/39.

[52]  See https://www.clickatell.com.

[53]  Case M.6314, 4 September 2012– Vodafone UK/Everything Everywhere/JV, paragraphs 234-235.

[54]  Case No M.6584 – Vodafone/Cable & Wireless, para. 28 and subsequent.

[55]  In the Recommendation on product market definition in the electronic communications sector, market 6  is  defined  as  follows:  "Wholesale
terminating segments of leased lines, irrespective of the technology used to provide leased or dedicated capacity". Commission Recommendation  of
17 December 2007 on relevant product and service markets within the electronic  communications  sector  susceptible  to  ex  ante  regulation  in
accordance with Directive 2002/21/EC  of  the  European  Parliament  and  of  the  Council  on  a  common  regulatory  framework  for  electronic
communications networks and services (2007/879/EC), OJ L 344, 28.12.2007, p. 65.

[56]  Case No. M. 5730, 29 January 2010 – Telefónica/Hansenet Telekommunikation,  recital  23,  Commission  decision  of  3  July  2012  in  case
COMP/M.6584 Vodafone/Cable&Wireless, recital  30.

[57]  See replies to Commission questionnaire Q1 Competitors – Wholesale leased lines Hungary, questions 5 and 6 and Q2; Competitors –  Wholesale
leased lines Romania, questions 5 and 6; Commission questionnaire Q3 Competitors – Retail market for business connectivity Hungary,  questions  5
and 6 and Q4 Competitors – Retail market for business connectivity Romania, question 5; and Commission  questionnaire  Q12  Retailers  of  mobile
telecommunications services Hungary, questions 5 and 6 and Q14 – Retailers of mobile telecommunications services Romania, questions 4 and 5.

[58]  See replies to Commission questionnaire Q1  Competitors  –  Wholesale  leased  lines  Hungary,  question  7;  Commission  questionnaire  Q3
Competitors – Retail market for  business  connectivity  Hungary,  questions  7  and  8  and  Commission  questionnaire  –  Retailers  of  mobile
telecommunications services Hungary, questions 7 and 8.

[59]  See replies to Commission questionnaire Q1  Competitors  –  Wholesale  leased  lines  Romania,  question  7;  Commission  questionnaire  Q3
Competitors – Retail market for  business  connectivity  Romania,  questions  7  and  8  and  Commission  questionnaire  –  Retailers  of  mobile
telecommunications services Romania, questions 7 and 8.

[60]  See replies to Commission questionnaire Q1 and Q2 Competitors – Wholesale leased lines, question 8;  Commission  questionnaire  Q3  and  Q4
Competitors  –  Retail  market  for  business  connectivity,  questions  9  and  10  and  Commission  questionnaire  Q12–  Retailers  of   mobile
telecommunications services - Hungary, questions 9-10 and Q14 –Retailers of mobile telecommunication services – Romania, questions 8-9.

[61]  See replies to Commission questionnaire Q1 and Q2 Competitors – Wholesale leased lines; Commission questionnaire Q3 and  Q4  Competitors  –
Retail market for business connectivity, and Commission questionnaire Q12 and Q14 – Retailers of mobile telecommunications services.

[62]  Commission decision of 3 July 2012 in case COMP/M.6584 Vodafone/Cable&Wireless, recital 31.

[63]  Commission Decision of  3 July 2012 in case M.6584,– Vodafone/Cable & Wireless, recital 25 et  seq.;  Commission  decision  of  29  January
2010, in case M.5730 – Telefónica/Hansenet Telekommunikation, recital 19.

[64]  See replies to the Commission questionnaire, Q.9 – providers of domestic call transit services Hungary, question 4 and Q.  12  –  retailers
of mobile telecommunications services Hungary question 17. See also minutes of the conference call with UPC, from 28 March 2014, page 2.

[65]  See replies to the Commission Questionnaire, Q. 10 – Providers of domestic cal transit services – Czech Republic, question 4 and to  Q.  11
– Retailers of mobile telecommunications services Czech republic, question 8.

[66]  Commission Decision of 3 July 2012, in case M.6584 – Vodafone/Cable & Wireless, recital 25-27.

[67]  Commission Decision of 3 July 2012 in case M.6584 – Vodafone/Cable & Wireless, recital 19 et seq.

[68]  Commission Decision of 3 July 2012 in case M.6584 – Vodafone/Cable & Wireless, recital 21.

[69]  See replies to Commission questionnaire Q15 to retailers of fixed voice services in Hungary of 19 March 2014, question 13.

[70]  Commission Decision of 20 September 2013 in case M.6990 – Vodafone/Kabel Deutschland, recital 111 et seq., and  Commission  Decision  of  3
July 2012 in case M.6584 – Vodafone/Cable & Wireless, recital 22 et seq.

[71]  Commission Decision of 20 September 2013 in case M.6990 – Vodafone/Kabel Deutschland, recital 232 et seq., and  Commission  Decision  of  3
July 2012 in case M.6584,– Vodafone/Cable & Wireless, recital 47 et seq.

[72]  Commission Decision of 20 September 2013 in case M.6990 – Vodafone/Kabel Deutschland, recital 114.

[73]  Commission decision of 1 March 2010 in case  COMP/M.5650  T-Mobile/Orange,  recital  38;  Commission  decision  of  3  July  2012  in  case
COMP/M.6584 Vodafone/Cable&Wireless, recital 24. Commission Decision of 20 September 2013 in case M.6990 – Vodafone/Kabel  Deutschland,  recitals
119 and 242.

[74]  Case No. M.6584, 3 July 2012 – Vodafone/Cable & Wireless, para. 14 et seq.

[75]  Replies to Commission Questionnaire Q8 - Providers of wholesale termination and hosting  of  non-geographical  numbers  to  competitors  in
Poland, question 4 – confidential. See also Replies to Commission Questionnaire Q13 - Retailers of mobile telecommunications services in  Poland,
question 5.

[76]  Replies to Commission Questionnaire Q7 -  Providers of wholesale termination and hosting of non-geographical numbers to competitors in  the
Czech Republic, question 4. Replies to Commission Questionnaire Q11 - Retailers of mobile telecommunications  services  in  the  Czech  Republic,
question 5.

[77]        Case No. COMP/M.6584, 3 July 2012 – Vodafone/Cable & Wireless, para. 18.

[78]  Replies to Commission Questionnaire Q13 - Retailers of mobile telecommunications services in  Poland,  question  8.  See  also  Replies  to
Commission Questionnaire Q8 -  Providers of wholesale termination and hosting of non-geographical numbers to competitors in Poland, question 5.

[79]  Replies to Commission Questionnaire Q7 -  Providers of wholesale termination and hosting of non-geographical numbers to competitors in  the
Czech Republic, question 5. Replies to Commission Questionnaire Q11 - Retailers of mobile telecommunications  services  in  the  Czech  Republic,
question 9.

[80]  Commission Decision of 2 October 2008 – Deutsche Telekom/OTE, recital 86 et subsequent. Cf. Commission Recommendation of 17  December  2007
on relevant product and service markets within the electronic communications  sector  susceptible  to  ex  ante  regulation  in  accordance  with
Directive 2002/21/EC of the European Parliament and of the Council on a common regulatory framework for electronic  communications  networks  and
services, OJ 2007, L 344/65, Annex – Market 2.

[81]  Commission Decision of 2 October 2008 – Deutsche Telekom/OTE, recital 15.

[82]  Commission Decision of 20 September 2013 in case M.6990 – Vodafone/Kabel Deutschland, recital 221 and subsequent  and  Commission  Decision
of 3 July 2012 in case M.6584 – Vodafone/Cable & Wireless, recital 41 and subsequent.

[83]  Commission Decision of 29 June 2009 in case M.5532 – Carphone Warehouse/Tiscali UK, recital 28 and subsequent.

[84]  Commission Recommendation 2007/879/EC of 17 December 2007 on relevant product and service  markets  within  the  electronic  communications
sector susceptible to ex ante regulation in accordance with Directive 2002/21/EC of the European Parliament  and  of  the  Council  on  a  common
regulatory framework for electronic communication networks and services, OJ L 344, 28.12.2007, p. 65.

[85]  Commission Decision of 29 June 2009 in case M.5532 – Carphone Warehouse/Tiscali UK, recital 28 and subsequent.

[86]  Commission questionnaires Q16 Competitors - Wholesale broadband offering Hungary of 13 March 2014 and Q3 Competitors –  Retail  market  for
business connectivity Hungary. .

[87]  Commission Decision of 20 September 2013 in case M.6990 – Vodafone/Kabel Deutschland, recital 163-134 and Commission Decision  of  29  June
2009 in case M.5532 – Carphone Warehouse/Tiscali UK, recital 48-53.

[88]  Commission questionnaires Q16 Competitors - Wholesale broadband offering Hungary of 13 March 2014 and Q3 Competitors –  Retail  market  for
business connectivity Hungary. However, please note that these questionnaires have a very low response rate.

[89]  When this Decision makes reference to "affected markets", it refers to instances where: for horizontal overlaps, the  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 Commission Regulation (EC) No 802/2004 implementing Council Regulation (EC) No  139/2004
on the control of concentrations between undertakings. Official Journal OJ L 336, 14.12.2013, p. 1-36. The abbreviation "N/A" when used  in  this
Decision means "Not Active".

[90]  IPTV means Internet Protocol Television and is a system through which television services are delivered using the Internet protocol over  a
packet-switched network such as the Internet, instead of being delivered through traditional terrestrial, satellite signal and  cable  television
formats.

[91]  The market shares calculated by the Parties include legacy (analogue and  digital  Synchronous  Digital  Hierarchy  "SDH"),  leased  lines,
Ethernet circuits and dark fibre. If a separate market for dark fibre were considered, the Parties' combined market share would  amount  to  [10-
20]% by revenue and volume (DT: [10-20]%; GTS CE: [0-5]%). In a separate market for dark fibre, the Parties' main competitors are:  Invitel  with
[40-50]%, MVMNet with [10-20]% and Nokia-Siemens-Trafficom with [10-20]%.

[92]  With regard to market data in terms of volume, the Parties were unable to provide a reliable split between the terminating  and  the  trunk
segments of wholesale leased lines. The Parties' combined market share in terms of volume in a hypothetical market  for  wholesale  leased  lines
with bandwidth below 2 Mbps would amount to [40-50]% (DT: [30-40]%; GTS CE: [5-10]%) and in a hypothetical  market  for  wholesale  leased  lines
with bandwidth above 2 Mbps would amount to [50-60]% (DT: [20-30]%; GTS CE: [20-30]%).

[93]  According to the Parties, the combined market shares of [40-50]% in the overall market for wholesale leased lines is  conservative,  as  it
includes wholesale services that the Parties are reciprocally providing to each other and that would become internal turnover after  the  merger.
When subtracting the revenues generated by cross-sales between the Parties from their combined turnover, the combined market shares would  amount
to [30-40]%.

[94]  See http://www.btel.hu.

[95]  Antenna Hungária has been recently acquired by MVMnet,  see  http://www.nasdaq.com/article/hungary-buys-back-antenna-hungaria-from-frances-
tdf-20140326-00787.

[96]  The Parties were unable to provide the market share of their main competitors in the possible sub-segments  of  the  market  for  wholesale
leased lines.

[97]  DT has a country-wide access network as well as a [& ] km backbone network in Hungary, covering all  major  Hungarian  cities.  These  are:
Budap.

[98]  DT has a country-wide access network as well as a […] km backbone network in Hungary, covering  all  major  Hungarian  cities.  These  are:
Budapest, Székesfehérvár, Zalaegerszeg, Győr, Pécs, Szeged, Szolnok, Debrecen and Miskolc.

[99]  In particular, the Target's fibre network covers mainly metropolitan areas, namely Budapest,  which  accounts  for  the  highest  share  of
metropolitan network with […] km, of which […] km are owned. In addition, GTS CE operates […] km of fibre access network in  eight  other  cities
in Hungary.

[100]       GTS CE' network comprises […] route km of fibre, of which […] km  are  owned,  […]  km  are  leased  and  the  remainder  consist  of
indefeasible rights of use ("IRU"). In addition, GTS CE operates a […] km backbone network, of which […] Km are owned,  while  the  remainder  of
its networking needs is based on long-term lease agreements.

[101]       Budapest, Debrecen, Miskolc, Szeged, Pécs, Győr, Nyíregyháza, Kecskemét, Székesfehérvár, Szombathely, Szolnok and Tatabánya.

[102]       The access points are as follows: […] in Zalaegerszeg, the country's 17th largest city  (60,000  inhabitants);  […]  in  Budaörs,  an
industrialised city in the close agglomeration of Budapest; […] in Sopron, the country's 18th largest city, located at the Austrian  border;  […]
in Bicske, also close agglomeration of Budapest; and […] in Dombóvár, in the south-western part of Hungary.

[103]       GTS CE generates a turnover of approximately EUR […]  in the trunk segment, which corresponds to [0-5]%  of  its  total  revenues  in
wholesale leased lines in Hungary. MT's turnover is also minimal in the trunk segment services, as it accounts for [5-10]% of its total  turnover
achieved with leased lines at wholesale level.

[104]       NMHH Regulatory Decision No. HF-1930-15/2011 of 10 January 2012 regarding the  obligations  imposed  on  operators  with  significant
market power on the market for wholesale terminating segments of leased lines.

[105]       According to respondents to the market investigation, barriers to entry are high also in the  trunk  and  terminating  segments,  see
replies to Commission questionnaire Q1 Competitors – Wholesale leased lines Hungary of 13 March 2014, question 19.

[106]       See replies to Commission questionnaire Q1 Competitors – Wholesale leased lines Hungary of 13 March 2014, question 21.

[107]       See replies to Commission questionnaire Q1 Competitors – Wholesale leased lines Hungary of 13 March 2014, question 15.

[108]       See replies to Commission questionnaire Q1 Competitors – Wholesale leased lines Hungary of 13 March 2014, questions 13 and 14.

[109]       See replies to Commission questionnaire Q1 Competitors – Wholesale leased lines Hungary of 13 March 2014, question 17 and 18.

[110]       See replies to Commission questionnaire Q1 Competitors – Wholesale leased lines Hungary of 13 March 2014, question 16.

[111]       In Hungary, DT's and GTS CE's networks overlap in  metropolitan  areas,  namely  in  the  following  16  cities:  Budapest,  Budaörs,
Debrecen,  Dombóvár,  Győr,  Kecskemét,  Miskolc,  Nyíregyháza,  Pécs,  Sopron,  Szeged,  Székesfehérvár,  Szombathely,  Szolnok,  Tatabánya  and
Zalaegerszeg.

[112]       Already in Budapest alone, there are eleven providers of wholesale leased lines.

[113]       These are: Budapest, Debrecen, Győr, Kecskemét, Miskolc, Nyíregyháza, Pécs, Szeged, Székesfehérvár, Szombathely, Szolnok, Tatabánya.

[114]       Local competitors present in the largest twelve cities where the Parties'  network  overlap  are:  Trafficom,  present  in  Budapest,
Távger, present in all twelve cities, Drávanet present in eleven cities, Novotron, present in four cities.

[115]         NMHH,   Summary   of   the   market   analysis    on    wholesale    trunk    segments    of    leased    lines,    available    at
http://english.nmhh.hu/dokumentum/150118/market_14_sum_en_second_round_20080410_.pdf.

[116]       Note that this sub-segment is partially regulated. In particular,  although  NMHH  lifted  price  caps  obligations  in  2012  as  it
considered the market to be sufficiently competitive, the  merged  entity  is  still  subject  to  transparency,  non-discrimination,  accounting
separation and access and interconnection obligations. Moreover, NMHH decided not to  impose  any  regulatory  obligations  for  the  market  for
terminating segments of leased lines with bandwidth above 2Mbps. See NMHH Regulatory Decision No. HF-1930-15/2011 of 10  January  2012  regarding
the obligations imposed on operators with significant market power on the market for wholesale terminating segments of leased lines.

[117]       Note also that in its analysis of 2012, NMHH considered that MT did not hold a  dominant  position  in  the  terminating  segment  of
leased lines with bandwidths above 2Mbps. See NMHH Regulatory Decision No. HF-1930-15/2011 of 10 January 2012 regarding the  obligations  imposed
on operators with significant market power on the market for wholesale terminating segments of leased lines.

[118]       For example, Drávenet (Pécs and Budapest), Jurop Telekom (Esztergom) and DV Info (Debrecen).

[119]       For example, Gysev, Tarr and E-on/Édász cover West Hungary; PR Telcom is present in North Hungary and Opticon in  the  South  of  the
country.

[120]       The Parties' combined market share in a market for wholesale leased lines excluding dark fibre would amount  to  [40-50]%  (DT:  [30-
40]%; GTS CE: [10-20]%).

[121]       See NMHH regulatory decision No HF/25016-187/2012 of 12 November  2013  regarding  the  obligations  imposed  on  the  operator  with
significant power on the market for call termination on public telephone networks provided at a fixed location.

[122]       See replies to Commission questionnaire Q9 Competitors – Wholesale market for domestic  call  transit  services  of  13  March  2014,
questions 8 and 9.

[123]       Minutes of the Call with a customer of domestic call transit services in Hungary – 31 March 2014.

[124]       The Parties submit that both layer 2 Ethernet solutions and layer 3 IP VPN solutions represent a low-cost and  effective  alternative
to leased lines, as they do not require the ownership of an entire physical (leased line) network and ensure the same level of security and  data
transmission speed.

[125]       See replies to Commission questionnaire Q3 Competitors – Retail Market for Business Connectivity Hungary of 13 March  2014,  question
23.1 and 23.3.

[126]       See replies to Commission questionnaire Q3 Competitors – Retail Market for Business Connectivity Hungary of 13 March  2014,  question
23.2 and 23.4

[127]       See replies to Commission questionnaire Q5 Customers – Retail Market for Business Connectivity Hungary of 13  March  2014,  questions
13 and 14.

[128]       This is supported by the Hungarian Telecom Regulator (NMHH): in January 2012, while withdrawing remedies on MT on the  retail  market
for leased lines services (decision no. HF-1586-12/2011), the NMHH found that "High or non-transitory barriers  to  entry  were  not  identified.
Despite of existence of structural barrier i.e. the infrastructure is not easily duplicated,  the  retail  market  service  can  be  provided  by
utilising the wholesale terminating and trunk segments of leased lines, and this lowers entry barriers to the retail market for the  minimum  set
of leased lines". See notification no.HU_2011_1270 to the European Commission pursuant to Art. 7(3) of the  Electronic  Communications  framework
Directive (2002/21/EC).

[129]       See NMHH regulatory decision No DH-8664-17/2010  of  8  September  2010  regarding  the  obligation  imposed  on  the  operator  with
significant power on the retail market for access to public telephone network at a fixed  location  for  residential  customers  and  the  retail
market for access to the public telephone network at a fixed location for non-residential customers.

[130]       In possible sub-segments comprising cable modem only, this market would not be affected as GTS CE does not offer these  services.  As
regards the sub-segment for broadband, the increment in the market share of the merged entity would be minor, since GTS  CE's  share  amounts  to
only [0-5]% of that market in value (DT's market share is [20-30]%). Finally, as regards the possible sub-segment  for  narrowband,  the  Parties
have not been capable of providing data for DT. However, this market will not give rise to competitive  concerns  because  (i)  GTS  CE's  market
share is minimal (approximately [5-10]%) and (ii) this is a dying market.

[131]       See NMHH Regulatory Decision No. HF-1930-15/2011 of 10 January 2012.

[132]       See replies to Commission questionnaire Q3 to competitors – retail market for business connectivity, question 41.

[133]       See replies to Commission questionnaire Q3 to competitors – retail market for business connectivity, question 43.

[134]       Note in this context that in its draft proposed review of the Recommendation on relevant markets susceptible to  ex-ante  regulation,
the Commission has considered as well the existence of a possible "Wholesale high-quality access" market, which would comprise leased  lines  and
ULL/   Bitstream   access   solutions,   given   their   similarities.   (See   the   Commission's    Draft    Recommendation,    available    at
http://ec.europa.eu/information_society/newsroom/cf/dae/document.cfm?doc_id=4189 and the Draft explanatory note on  relevant  markets,  available
at http://ec.europa.eu/information_society/newsroom/cf/dae/document.cfm?doc_id=4190, section 4.2.2.3. "Wholesale high-quality access".)

[135]       For ULL, see NMHH Regulatory Decision No.  HF-44-10/2011  of  6  May  2011  regarding  the  obligations  imposed  on  operators  with
significant market power on the market for wholesale unbundled access (including shared access) to metallic loops and sub-loops for  the  purpose
of providing broadband and voice services. For Bitstream, see NMHH Regulatory Decision No. HF-56-12/2011 of 6 May 2011 regarding the  obligations
imposed on operators with significant market power on the market for wholesale broadband access.

[136]       This market is currently not regulated. NMHH, Summary of the market analysis on wholesale trunk segments  of  leased  lines,  page  7
(available at http://english.nmhh.hu/dokumentum/150118/market_14_sum_en_second_round_20080410_.pdf).

[137]       See Commission questionnaire Q12 – Retailers of mobile telecommunication services Hungary, question 23.

[138]       See Commission questionnaire Q12 – Retailers of mobile telecommunication services Hungary, question 23.1.

[139]       See Commission questionnaire Q12 – Retailers of mobile  telecommunication  services  Hungary,  question  28  and  agreed  minutes  of
conference call of 28 March 2014 with Retailer A of mobile telecommunication services.

[140]       See agreed minutes of conference call of 28 March 2014 with Retailer B of mobile telecommunication services.

[141]       See agreed minutes of conference calls of 28 March 2014 with Retailer A of mobile telecommunication services and with Retailer  B  of
mobile telecommunication services.

[142]       See See Commission questionnaire Q12 – Retailers of mobile telecommunication services Hungary, question 29.

[143]       See agreed minutes of 28  March  2014  with  Retailer  A  of  mobile  telecommunication  services  and  with  Retailer  B  of  mobile
telecommunication services.

[144]       See Commission questionnaire Q12 – Retailers of mobile telecommunication services Hungary, question 26 and 27.

[145]       See Commission questionnaire Q12 – Retailers of mobile telecommunication services Hungary, question 44 and agreed minutes  conference
call of 28 March 2014 with Retailer A of mobile telecommunication services.

[146]       See agreed minutes conference call of 28 March 2014 with Retailer A of mobile telecommunication services.

[147]       If a separate market for dark fibre were considered, the Parties' combined market share would  amount  to  [10-20]%  by  revenue  and
volume (DT: [10-20]%; GTS CE: [0-5]%).

[148]       See Commission questionnaire Q12 – Retailers of mobile telecommunication services Hungary, question 32.

[149]       Commission questionnaire Q12 – Retailers of mobile telecommunication services Hungary, question 33.

[150]       See NMHH Regulatory Decision No. HF/25016-187/2012 of 12 November 2013.

[151]       The majority of respondents to the market investigation from the supply side confirmed that entry is easy due to the  fact  that  all
operators have an obligation to provide direct interconnection to their networks (see replies to Commission  Questionnaire  Q.  9  Competitors  –
Providers of domestic call transit services in Hungary of 13 March 2014, question 7).

[152]       Such as VoIP services. See NMHH answers to European Commission questionnaire, of 20 March 2014, page 1.

[153]       See replies to Commission Questionnaire Q15 Competitors - Providers of fixed voice services in Hungary of  13  March  2014,  question
24.

[154]       See replies to Commission Questionnaire Q15 - Providers of fixed voice services in Hungary of 13 March 2014, questions 28 and 29.

[155]       See replies to Commission Questionnaire Q9 - Providers of domestic call transit services in Hungary of 13 March  2014,  question  19.
See Parties' reply to RFI N.6 of 9 April 2014, question 3, according to which DT would source only EUR […] of  wholesale  domestic  call  transit
services for its provision of retail fixed voice services in Hungary in 2012.

[156]       See Parties' reply to RFI N.6 of 9 April 2014, question 3, according to which GTS CE would source only EUR […] of wholesale  domestic
call transit services for its provision of retail fixed voice services in Hungary in 2012.

[157]       See replies to Commission Questionnaire Q12 – Retailers of mobile telecommunications services in Hungary of 13 March  2014,  question
40.

[158]       See replies to Commission Questionnaire Q. 12 – retailers of mobile telecommunications services Hungary, question 41.

[159]       See minutes of conference call with Telenor from 28 March 2014,  p.  1  and  minutes  of  the  conference  call  with  Vodafone  from
28.03.2014.

[160]       See Minutes of conference call with Vodafone, from 28 March 2014, p. 4 and Minutes of the conference call with Telenor from 28  March
2014, p.1.

[161]       See replies to Commission questionnaire Q.12 – retailers of mobile telecommunications services Hungary, question 43.

[162]       See Parties' reply to RFI N.6 of 9 April 2014, question 3, according to which DT would source EUR  […]  of  wholesale  domestic  call
transit services for its provision of retail mobile telecommunications services in Hungary in 2012.

[163]       The Parties have not been able to precisely estimate their market share on this market.

[164]       See NMHH Regulatory Decision No. HF-44-10/2011 of 6 May 2011 regarding the obligations imposed on operators with  significant  market
power on the market for wholesale unbundled access (including shared access) to metallic  loops  and  sub-loops  for  the  purpose  of  providing
broadband and voice services and NMHH Regulatory Decision No. HF-56-12/2011 of 6 May 2011 regarding the obligations  imposed  on  operators  with
significant  market  power  on  the  market  for  wholesale  broadband  access  (both  available  at  http://nmhh.hu/tart/index/194/Piacelemzesi_
hatarozatok).

[165]       The Parties were not able to provide an estimate of the size of the Hungarian market for wholesale broadband offering. However,  GTS'
turnover in the resale of others operators' DSL services amounts to EUR […] and thus it can be considered a de minimis player.

[166]       According to the Parties, DT spent approximately EUR […] on wholesale broadband access services provided by third party operators  in
2012 and GTS EUR […].

[167]       See agreed minutes of conference call of 31 March 2014 with Enternet and  replies  to  Commission  questionnaire  Q16  Competitors  –
Wholesale Broadband offering Hungary of 20 March 2014.

[168]       See replies to Commission questionnaire Q3 Competitors – Retail market for business connectivity Hungary of 21 March 2014.

[169]       The Parties have not been able to estimate precisely their market share on this market.

[170]       DT has spent EUR […]  in acquiring broadband access services from third-party offerings 2012.

[171]       See agreed minutes of conference call of 31 March 2014 with Enternet.

[172]       See replies to Commission questionnaire Q15 to retailers of fixed voice services of 13 March 2014, question 48.  See  agreed  minutes
of conference call of 31 March 2014 with Enternet, paragraph 11.

[173]       As submitted by the Parties, DT does not purchase any wholesale resale of broadband offering from third-party providers. As  for  GTS
CE, its limited purchases (approximately EUR […]) of such input are not used to either provide  retail  business  connectivity  or  retail  fixed
voice services.

[174]       See NMHH Regulatory Decision No. HF-44-10/2011 of 6 May 2011 regarding the obligations imposed on operators with  significant  market
power on the market for wholesale unbundled access (including shared access) to metallic  loops  and  sub-loops  for  the  purpose  of  providing
broadband and voice services.

[175]       See NMHH Regulatory Decision No. HF-56-12/2011 of 6 May 2011 regarding the obligations imposed on operators with  significant  market
power on the market for wholesale broadband access.

[176]       See NMHH Regulatory Decision No. HF/25016-187/2012 of 12 November 2013  regarding  the  obligations  imposed  on  the  operator  with
significant power on the market for call termination on public telephone networks provided at a fixed location.

[177]       See NMHH Regulatory Decision No. HF-1595-34/2011  of  23  August  2011  regarding  the  obligations  imposed  on  the  operator  with
significant power on the market for voice call termination on individual mobile networks.

[178]       See NMHH Regulatory Decision No. HF-1948-28/2011  of  23  August  2011  regarding  the  obligations  imposed  on  the  operator  with
significant power on the market for call origination on the public telephone network provided at a fixed location.

[179]       These are point-to-point, digital, transparent, and symmetric connectivities between two points located in Romtelecom PoP  (Point  of
Presence).

[180]       See the Explanatory Memorandum to ANCOM's Regulatory Decision No. 15 of 10 January 2011 regarding the  obligations  imposed  on  the
    operator with significant power on the market of leased lines – terminating segments with a transfer capacity of up to and including 2  Mbps
    (available at http://www.ancom.org.ro/en/ancom-decisions_1130).

[181]       The Parties submit that DT does not offer wholesale leased lines in the terminating segment with bandwidth above 2 Mbps as  a  stand-
alone service. Rather, high-speed wholesale leased lines are provided as part of an integrated service of total-circuit  wholesale  leased  lines
above 2 Mbps, comprising two terminating segments (at either end of the connection) and  one  trunk  segment  (in  between  the  two  terminating
segments). The Parties further submit that end-to-end circuits provided by DT are not interchangeable with terminating services provided  by  GTS
as these services address different customer groups. As a consequence, the Parties submit  that  the  market  share  of  DT  in  this  market  is
therefore actually 0%. The Commission, however, still assesses this market by assuming a market share  of  DT  of  [20-30]%  in  the  terminating
segment above 2 Mbps although the Parties' combined market share could be lower.

[182]       The Parties submit that GTS CE currently maintains a national fibre backbone network with overall length of approximately  […]  route
km, as well as […] km metropolitan access networks, primarily in Bucharest. However, only […] of fibre  in  its  national  backbone  network  are
actually owned by GTS.

[183]       See ANCOM's Regulatory Decision No. 15 of 10 January 2011 regarding the obligations imposed on the operator  with  significant  power
on  the  market  of  leased  lines  –  terminating  segments  with  a  transfer  capacity  of  up  to  and  including  2   mbps   (available   at
http://www.ancom.org.ro/en/ancom-decisions_1130).

[184]       See replies to Commission questionnaires Q2 Competitors – Wholesale leased lines, Romania of 13 March 2014, question 19.

[185]       For instance, Government Decision No. 490/2011,  supplementing  the  General  Urbanism  Regulation  imposed  the  obligation  on  the
operators to deploy infrastructure only underground. Many of the respondents in  the  market  investigations  pointed  out  at  additional  costs
brought by the implementation of this Decision, which would make entry on this market  difficult,  due  to  the  interdiction  to  deploy  aerial
infrastructure. However, ANCOM's view on barriers to entry differs from that of the competitors. ANCOM has indicated that it is  rather  easy  to
roll out infrastructure and ongoing projects in Bucharest and other cities allow operators to build their infrastructure underground. See  agreed
minutes of conference call of 18 March 2014 with ANCOM, paragraph 9.

[186]       See replies to Commission questionnaires Q2 Competitors – Wholesale leased lines, Romania of 13 March 2014, question 22.

[187]       See replies to Commission questionnaires Q2 Competitors – Wholesale leased lines, Romania of 13 March 2014, question 15.

[188]       See replies to Commission questionnaires Q2 Competitors – Wholesale leased lines, Romania of 13 March 2014,  question  13;  see  also
agreed minutes of conference call of 27 March 2014 with Orange, paragraph 6 and agreed minutes of conference call with UPC, paragraph 8.

[189]       This is mainly because DT offers the most complete set of services in the market, therefore it  is  the  closest  competitor  to  the
other suppliers of wholesale leased lines services.

[190]       See replies to Commission questionnaires Q2 Competitors – Wholesale leased lines, Romania of 13 March 2014, question 38.

[191]       See replies to Commission questionnaires Q2 Competitors – Wholesale leased lines, Romania of 13 March 2014, questions 17 and 18.

[192]       See replies to Commission questionnaires Q2 Competitors – Wholesale leased lines, Romania of 13 March 2014, question 24.

[193]       See replies to Commission questionnaires Q2 Competitors – Wholesale leased lines, Romania of 13 March 2014, questions 4 and 12.

[194]       See replies to Commission questionnaires Q2 Competitors – Wholesale leased lines, Romania of 13 March 2014, question 38.

[195]       ANCOM statistical data report, June 2013, page 58 (available at: https://statistica.ancom.org.ro:8000/sscpds/public/files/77).

[196]       ANCOM's view on barriers to entry differs from that of the suppliers. ANCOM has indicated to the Commission that it  is  rather  easy
to roll out infrastructure and ongoing projects in Bucharest and other cities allow operators to build their  infrastructure  underground.  ANCOM
does not foresee any impact of the Government Decision no. 490/2011, supplementing the General Urbanism Regulation on the  competitive  situation
of the wholesale market for leased lines in Romania, as the operators could either ground their own cables or use for  instance  the  underground
conduits of the Netcity project. In ANCOM's view, it is unlikely that operators will leave the wholesale  leased  lines  market  because  of  the
costs relating to the grounding of cables. See agreed minutes of conference call of 18 March 2014 with ANCOM, paragraph 9.

[197]       See agreed minutes of conference call of 18 March 2014 with ANCOM, paragraph 4.

[198]       See the Explanatory memorandum to ANCOM's Regulatory Decision No. 15 of 10 January 2011 regarding  the  obligations  imposed  on  the
operator with significant power on the market of leased lines – terminating segments with a transfer capacity of  up  to  and  including  2  Mbps
(available at http://www.ancom.org.ro/en/ancom-decisions_1130).

[199]       Market shares as provided by the Parties for 2012.

[200]       Ten providers identified by ANCOM. See agreed minutes of conference call of 18 March 2014 with ANCOM, paragraph 8.

[201]       Market shares as provided by the Parties for 2012.

[202]       See the Explanatory memorandum to ANCOM's Regulatory Decision No. 15 of 10 January 2011 regarding  the  obligations  imposed  on  the
operator with significant power on the market of leased lines – terminating segments with a transfer capacity of  up  to  and  including  2  Mbps
(available at http://www.ancom.org.ro/en/ancom-decisions_1130).

[203]       Market shares as provided by the Parties for 2012.

[204]       The Parties' combined market shares in a market for wholesale leased lines excluding dark fibre would amount to  [30-40]%  (DT:  [20-
30]%; GTS CE: [5-10]%).

[205]       DT's market share has dropped by approximately [5-10]% between 2010 and 2012.

[206]       IDC, Romanian Telecommunications Market Competitive Analysis, 2012, page 38.

[207]       These competitors are present in all market segments. Vodafone ([10-20]% broadband access to large business customers;  [30-40]%  VPN
services and [5-10]% retail leased lines; Orange [20-30]% broadband access to large  business  customers,  [10-20]%  VPN  services  and  [10-20]%
retail leased lines; RCS&RDS [10-20]% broadband access to large business customers, [5-10]% VPN services and [0-5]% retail leased lines; UPC  [5-
10]% broadband access to large business customers, [0-5]% VPN services and [0-5]% retail leased lines; Euroweb [0-5]%  for  broadband  access  to
large business customers and VPN services and [0-5]% leased lines; Prime Telecom [0-5]% for all market segments).

[208]       IDC, Romania Telecommunications Market Competitive Analysis, 2012, page 39.

[209]       ANCOM statistical data report “Romanian Electronic Communications Market – updated based upon the statistical data  corresponding  to
1 July – 31 December 2012 reporting period”, 2012, page 55.

[210]       See replies to Commission questionnaires Q4 Competitors – Retail  market  for  business  connectivity,  Romania  of  13  March  2014,
question 19.

[211]       IDC, Romanian Telecommunications Market Competitive Analysis, 2012, page 39.

[212]       See replies to Commission questionnaires Q4 Competitors – Retail Market for Business Connectivity Romania of 13 March 2014,  question
4.

[213]       See replies to Commission questionnaires Q4 Competitors – Retail Market for Business Connectivity Romania of 13 March 2014,  question
15.

[214]       See replies to Commission questionnaires Q6 Customers – Retail Market for Business Connectivity Romania of 13  March  2014,  question
13.

.[215]      See replies to Commission questionnaires Q6 Customers – Retail Market for Business Connectivity Romania of 13  March  2014,  question
10.

[216]       See replies to Commission questionnaires Q6 Customers – Retail Market for Business Connectivity Romania of 13 March  2014,  questions
15 and 16.

[217]       Market shares as provided by the Parties for 2012.

[218]       Number of minutes.

[219]       See ANCOM regulatory decision No 1014/2009 on designating Romtelecom as a provider with significant market power on  the  market  for
services of fixed call origination on the public telephone networks and on the market for services of  call  switched  national  transit  on  the
public telephone networks, and on imposing obligations on this provider.

[220]       GTS achieved a turnover of EUR […] on this market in 2012.

* Should read [30-40]%.

[221]       See replies to Commission questionnaires Q2 Competitors – Market for Wholesale Leased Lines Romania, of 13 March 2014,  question  29.
Some suppliers noted that supplying new customers (to make up for previous demand by the Parties) would not necessarily be easy as  they  do  not
expect an increase of demand for wholesale leased lines. See replies to Commission questionnaires Q2 Competitors – Market  for  Wholesale  Leased
Lines Romania, of 13 March 2014, question 30. See also agreed minutes of conference call of 28 March 2014 with Prime Telecom, paragraph 6.

[222]       See replies to Commission questionnaires Q2 Competitors – Market for Wholesale Leased Lines Romania, of 13 March 2014, question 31.

.[223]      See replies to Commission questionnaires Q4 Competitors – Retail  Market  for  Business  Connectivity  Romania,  of  13  March  2014,
question 31.

[224]       See replies to Commission questionnaires Q4 Competitors – Retail  Market  for  Business  Connectivity  Romania,  of  13  March  2014,
question 31.

[225]       See replies to Commission questionnaires Q4 Competitors – Retail  Market  for  Business  Connectivity  Romania,  of  13  March  2014,
question 33.

[226]       See replies to Commission questionnaires Q4 Competitors – Retail  Market  for  Business  Connectivity  Romania,  of  13  March  2014,
question 34.

[227]       See replies to Commission questionnaires Q4 Competitors – Market for Wholesale Leased Lines Romania, of 13 March 2014, question 16.

[228]       See replies to Commission questionnaires Q4 Competitors – Retail  Market  for  Business  Connectivity  Romania,  of  13  March  2014,
question 35.

[229]       See replies to Commission questionnaires Q17 – Retailers of mobile telecommunication services Romania, of  13  March  2014,  question
27.

[230]       See replies to Commission questionnaires Q17 – Retailers of mobile telecommunication services Romania, of  13  March  2014,  question
28.

[231]       See replies to Commission questionnaires Q17 – Retailers of mobile telecommunication services Romania, of  13  March  2014,  question
22.

[232]       See replies to Commission questionnaires Q17 – Retailers of mobile telecommunication services Romania, of  13  March  2014,  question
30.

[233]       See replies to Commission questionnaires Q17 – Retailers of mobile telecommunication services Romania, of  13  March  2014,  question
31.

[234]       See replies to Commission questionnaires Q17 – Retailers of mobile telecommunication services Romania, of  13  March  2014,  question
32.

[235]       See ANCOM Regulatory Decision No. 1014/2009 on designating Romtelecom as a  provider  with  significant  power  on  the  market  for
    services of fixed call origination on the public telephone networks and on the market for services of call switched national transit on  the
    public  telephone  networks,  and  on  imposing   obligations   on   this   provider,   communicated   to   the   operator   (available   at
    http://www.ancom.org.ro/en/ancom-decisions_1130).

[236]       ANCOM Regulatory Decision No. 653 of 20 September 2010 regarding the obligations imposed on the operator with significant  power  on
    the market of access services to infrastructure elements (available at http://www.ancom.org.ro/en/ancom-decisions_1130).

[237]       ANCOM Regulatory Decision No. 91 of 24 January 2012 regarding the identification of Romtelecom S.A.  as  operator  with  significant
    power on the market of fixed call termination on its own public telecommunications network; and ANCOM Regulatory  Decision  No.  107  of  24
    January 2012 regarding the identification of Romtelecom S.A. as operator with significant power on the market of mobile call termination  on
    its own public telecommunications network (both available at http://www.ancom.org.ro/en/ancom-decisions_1130).

[238]       ANCOM Regulatory Decision No. 1014/2009 on designating Romtelecom as a provider with significant power on the market for services of
    fixed call origination on the public telephone networks and on the market for services of call  switched  national  transit  on  the  public
    telephone   networks,   and   on   imposing   obligations   on   this   provider,   communicated   to    the    operator    (available    at
    http://www.ancom.org.ro/en/ancom-decisions_1130). In November 2013, after the second  market  review,  ANCOM  decided  to  maintain  current
    obligations imposed on Romtelecom.

[239] Notably, the International markets for wholesale and retail  GTS,  retail  market  for  fixed  voice  services,  retail  supply  of  mobile
    telecommunication services and wholesale market for end-to-end calls.

[240]       See  http://www.ancom.org.ro/en/ancom-is-reviewing-a-series-of-wholesale-and-retail-markets-corresponding-to-the-telephone-services-
    provided-at-fixed-locations-_5042. See also ANCOM market analysis of 12 November 2013 regarding the markets  for  wholesale  access  to  the
    unbundled local loop, wholesale call origination on the public telephone network at a fixed location and wholesale  call  transit  on  fixed
    networks, p. 93 (available at http://www.ancom.org.ro/en/uploads/forms_files/ Decizie_2013_1154_referat1393505851.pdf).

.[241]      ANCOM has found that this market to be competitive due to competitors such as Orange and Vodafone, and due  to  the  fact  that  DT's
market share has constantly decreased over the last few years.

[242]       The Parties were unable to provide market shares for this market.

[243]       Includes both Romtelecom's and Combridge's activities on this market.

[244]       The Parties submit that the market for end-to-end calls is in fact of limited importance in Romania, and that the broad  majority  of
operators relies on the interconnection agreements instead.

[245]       In the Czech Republic, DT Group’s only fixed-access network is in Prague (which also is the regional focus of DT  Group’s  activities
in fixed telecommunications services). In addition more than two thirds  of  DT's  overall  revenue  in  the  Czech  Republic  relate  to  mobile
telecommunication services.

[246]       In the Czech Republic, both Parties are active on this market (DT: [30-40]%, GTS CE: [0-5]%). DT is active as a MNO  whereas  GTS  CE
is active both as an MVNO and a MVNE. The vertical relationship between GTS CE's MVNE activities and the retail market for the supply  of  mobile
telecommunications services will be analysed in section 5.3.3.5 below. For its MVNO activities, in 2013  GTS  CE  had  a  turnover  of  EUR  […].
However, no competition concerns will arise from this de minimis overlap. First, GTS CE has insignificant activities  on  this  market,  so  that
there will be no appreciable impact post-merger. Second, alternative providers of retail mobile telecommunications services will be active, post-
transaction in the Czech Republic, namely MNOs such as Telefonica ([30-40]%) and Vodafone ([20-30]%), but also MVNOs  such  as  Bleskmobile  ([0-
5]%) and Tesco Mobile ([0-5]%), among others. Therefore, this overlap will not be analysed further.

[247]       Based on IDC, Central and Eastern European Telecom Services Database 3Q13.

[248]       All competitor market shares submitted by the Parties refer to 2012.

[249]       In the absence of public available information, the Parties' best estimates rely on the 2006 decision of the Czech telecom  regulator
that identified a market share for GTS of 33%. See CTU, Regulatory Decision No. CZ/2006/0448 regarding  the  market  analysis  on  the  wholesale
market of transit services in the fixed public telephone network.

[250]       CTU Regulation of General Nature No. A/3/12.2013-8 of 10 December 2013 providing the market for call  termination  individual  public
telephone networks provided at a fixed location analysis.

[251]       GTS, [50-60]% (in volume), BT ([20-30]%), Dial Telecom ([10-20]%) and Telefonica ([0-5]%).  DT's  (T-Mobile  Czech  Republic)  market
share would be around [0-5]%. See agreed minutes of conference call of 19 March 2014 with CTU – Czech Telecom Regulator, paragraph 4.

[252]       See replies to Commission Questionnaire Q10 - Providers of domestic call transit services in the Czech Republic, question 6.

[253]       Such global SMS providers are Acision, Mblox, HQSMS, TM4B SMS GATEWAY, Truesenses, bulkSMS.com or US headquartered Clickatell.

[254]       The wholesale market for the provision of fixed call termination services is vertically related notably to (i) the market for  retail
global telecommunication services, (ii) the wholesale market for global telecommunication services; (iii) the market for retail supply  of  fixed
voice services and (iv) the market for retail supply of mobile telecommunication services to end customers and (v) the wholesale market for  end-
to-end calls. The wholesale market for the provision of mobile termination services is vertically related to aforementioned markets (i)  to  (iv)
as well as (v) the market for retail bulk of SMS services.

[255]       See CTU Regulation of General Nature No. A/3/12.2013-8 of 10 December 2013 providing the market for call  termination  on  individual
public telephone networks provided at a fixed location analysis (http://www.ctu.cz/cs/download/art/oop/rozhodnuti/oop_art-03-12_2013-08.pdf)  and
CTU Regulation of General Nature No. A/7/12.2013-9 of 10 December 2013 providing the market for  voice  call  termination  on  individual  mobile
networks (http://www.ctu.cz/cs/download/art/oop/ rozhodnuti/oop_art-07-12_2013-09.pdf).

[256]       Commission Recommendation of 7 May 2009 on the Regulatory Treatment of Fixed and Mobile Termination  Rates  in  the  EU  (OJ  L  124,
20.5.2009, p. 67).

[257]       See agreed minutes of conference call of 19 March 2014 with CTU – Czech Telecom Regulator, paragraph 4.

[258]       CTU Regulatory Decision on fixed line call termination No. A/3/12.2013-8 of 10 December 2013.

[259]       See agreed minutes of the conference call of 10 March 2014 with the CTU - Czech Republic Telecom Regulator, page 1.

[260]       See agreed minutes of the conference call of 10 March 2014 with the CTU - Czech Republic Telecom Regulator, page 2.

[261]       See agreed minutes of the conference call of 10 March 2014 with the CTU - Czech Republic Telecom Regulator.

[262]       See replies to Commission Questionnaire Q11 - Retailers of mobile telecommunication services in the Czech Republic, question 18.  See
also agreed minutes of conference call of 31 March 2014 with Vodafone Czech Republic and agreed minutes of conference call of 28 March 2014  with
Telefonica 02.

[263]       See replies to Commission Questionnaire Q11 - Retailers of mobile telecommunication services in the Czech Republic, question 19.  See
also agreed minutes of the conference call of 31 March 2014 with Vodafone.

[264]       See agreed minutes of the conference call of 31 March 2014 with Vodafone, page 2. See also agreed minutes of the conference  call  of
28 March 2014 with Telefonica 02, page 1.

[265]       See replies to Commission Questionnaire Q11 - Retailers of mobile telecommunication services in the Czech Republic, question 11.  See
agreed minutes of the conference call of 31 March 2014 with Dial Telecom, page 1.

[266]       See Parties' reply to RFI N.6 of 9 April 2014, question 3, according to which DT would source  only  EUR […]  of  wholesale  domestic
call transit services for its provision of retail mobile telecommunications services in the Czech Republic in 2012.

[267]       GTS CE would be active only marginally on the retail market for mobile telecommunications services. The turnover achieved  by  it  by
providing these services to corporate customers in 2013 was only EUR […].

[268]       MVNOs collectively serve approximately 700,000 subscribers and the estimated overall  market  volume  represents  approximately  14.5
million subscribers.

[269]        Cf.  Telegeography,  MVNOs  flock  to  Czech  mobile   market   in   2013,   report   says,   4   December   2013   (available   at:
http://www.telegeography.com/products/commsupdate/articles/2013/12/04/mvnos-flock-to-czech-mobile-market-in-2013-report-says).

[270]       See replies to Commission Questionnaire Q. 11- Retailers of mobile telecommunication services in the Czech Republic, question 11.

[271]       See agreed minutes of the conference call of 10 March 2014 with the Czech Republic Telecom Regulator page 3.

[272]       See agreed minutes of the conference call of 10 March 2014 with the Czech Republic Telecom Regulator page 3.

[273]       See agreed minutes of the conference call of 31 March 2014 with Vodafone Czech Republic, paragraph 8.

[274]       See agreed minutes of conference call of 31 March 2014 with CD-Telematika, page 1.

[275]       See replies to Commission Questionnaire Q11 - Retailers of mobile telecommunication services in the Czech Republic, question 31.  See
also agreed minutes of the conference call of 28 March 2014 with a retailer of communication services and agreed minutes of  conference  call  of
31 March 2014 with another retailer of communication services.. See also replies to Commission Questionnaire Q10 –  Providers  of  domestic  call
transit services in the Czech Republic, question 14.

[276]       These MVNEs all rely on Vodafone's network.

[277]       MVNOs collectively serve approximately 700,000 subscribers and the estimated overall  market  volume  represents  approximately  14.5
million subscribers.

[278]       The Parties have not been capable of submitting any estimate of the market share of any of them  or  of  their  competitors.  In  any
case, the Parties have submitted in the Form CO and in the subsequent RFI of 7 April 2014 that DT is not active  on  this  market  in  the  Czech
Republic.

[279]       See agreed minutes of conference call of 8 April 2014 with Telefónica CZ, and agreed minutes of conference call of 9 April 2014  with
Vodafone CZ.

[280]       See agreed minutes of conference call of 8 April 2014 with Telefónica CZ, and agreed minutes of conference call of 9 April 2014  with
Vodafone CZ.

[281]       Such as Google Voice/Hangouts, Skype (Microsoft) and Facetime (Apple).

[282]       The fact that DT already offers combined services has been confirmed by Dial Telecom – see minutes of conference call from  31  March
2014, p.2.

[283]       More than two thirds of DT's revenue in Poland pertains to mobile services provided to end customers.

[284]       UKE, Regulatory Decisions No DART-SMP-6040-5/11 (22) of 26 October 2011 regarding  the  obligations  imposed  on  the  operator  with
significant market power on the market for call termination on public telephone networks provided at a fixed location and Regulatory Decision  No
DART-SMP-6040-7/11 (82) of 14 December 2012 regarding the obligations imposed on the operator with significant power  on  the  market  for  voice
call termination on individual mobile networks.

[285]       Commission Recommendation of 7 May 2009 on the Regulatory Treatment of Fixed and Mobile Termination Rates in the EU.

[286]       Since DT was not active as a fixed network provider, DT has only started to be active in the market  for  wholesale  termination  and
hosting of non-geographic numbers in Poland since 2013 and so far its turnover is minimal and of no competitive relevance.

[287] European Commission, Information Society and Media Directorate-General, POLAND 2011 Telecommunication Market and  Regulatory  Developments,
18 June 2012, page 1, available at http://ec.europa.eu/digital-agenda/sites/digital-agenda/files/PL_Country_Chapter_17th_Report _0.pdf.

[288] Based on Telecommunications Act of 16 July 2004 (Journal of Laws of 03 August 2004). An unofficial consolidated English translation by  the
Polish Office of Electronic Communications (as of June 2013) is available at http://www.en.uke.gov.pl/files/?id_plik=41.

[289] Replies to Commission Questionnaire Q13 - Retailers of mobile telecommunications services in Poland, question 16.

[290]       Replies to Commission Questionnaire Q13 - Retailers of mobile telecommunications services in Poland, question 15

[291]       Replies to Commission Questionnaire Q13 - Retailers of mobile telecommunications services in Poland, question 17.

[292]       Replies to Commission Questionnaire Q13 - Retailers of mobile telecommunications services in Poland, question 12.

[293]       Replies to Commission Questionnaire Q13 - Retailers of mobile telecommunications services in Poland, question 19.

[294]       Replies to Commission Questionnaire Q13 - Retailers of mobile telecommunications services in Poland, question 20.

[295]       These market shares remain indeed below the 30% thresholds set out  paragraph  25  of  the  Guidelines  of  the  assessment  of  non-
horizontal mergers under Merger Regulation.

[296]       The main competitors of the Parties are Orange, Polkomtel and Play with market shares by value in  2012  of  approximately  [30-40]%,
[20-30]% and [10-20]% respectively.

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