By Patrick Costello

 

The European Union said Wednesday that a network-sharing agreement between mobile operators O2 Czech Republic AS (TELEC.PR) and Deutsche Telekom's (DTE.XE) T-Mobile Czech Republic AS subsidiary may restrict competition in breach of the bloc's antitrust rules.

The operators' agreement--which facilitates the rollout of communications networks by reducing costs--has gradually expanded since its launch in 2011, the EU said.

It currently covers all mobile technologies and roughly 85% of the country's population, the EU said.

"In the present case, we have concerns that the network sharing agreement between the two major operators in Czechia reduces competition in the more densely populated areas of the country," EU Commissioner Margrethe Vestager said.

The EU said the agreement--under investigation since 2016--is likely to remove incentives for the two mobile operators to improve their networks and services rather than lead to greater efficiencies and higher service quality.

As a result, the EU said its preliminary conclusion is that the agreement restricts competition and harms innovation. The companies now have time to respond to the EU's concerns or risk facing a fine for anti-competitive behavior. The EU said there is no deadline for ending its investigation.

 

Write to Patrick Costello at patrick.costello@dowjones.com.

 

(END) Dow Jones Newswires

August 07, 2019 07:11 ET (11:11 GMT)

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