The proposed network sharing joint venture between Orange and Proximus has been slowed as the Belgian Competition Authority (BCA) launches an investigation.
At the request of Telenor and Telenet, the Belgian authorities have placed temporary measures on Orange and Proximus to halt a network sharing joint venture while it investigates the potential impact on competition in the market. The original agreement was between the two parties was concluded in November and will remain stagnant until at least March 16.
Both Orange and Proximus have noted the complaint but rejected the basis of the opposition from Telenet.
“The sharing agreement for the mobile access network will have positive effects for the customers and for the Belgian society as a whole, in particular a faster and more extensive deployment of 5G, a significant reduction in total energy consumption and an improvement of the global mobile service experience, while maintaining a strong differentiation between the parties on services and customer experience,” the pair said in a joint statement.
As part of the joint venture, the pair have said the rollout of a joint radio access network would allow the number of mobile sites to be 20% higher compared to each operator’s current stand-alone radio access network. This improved coverage is claimed to increase the footprint to more than 10,000 households across the country.
Each party would retain full control over their own spectrum assets and operate their core networks independently to drive differentiation. The network sharing agreement would span across 2G, 3G, 4G and 5G.
While this does sound positive for the consumers of Belgium, a complaint from the third-largest operator should not be a monumental surprise.
Statistics curtesy of Ovum World Information Series (WIS)
Telenet’s has suggested the joint-venture would create a quasi-monopoly, as the number of infrastructure players in the market would be reduced from three to two. The telco also suggests BEREC guidelines would prevent such a joint-venture from materialising as it would undermine intense infrastructure competition.
Telenet is also pointing towards a similar agreement in the Czech Republic between O2 and T-Mobile. Despite this agreement was far less wide-ranging (it did not span across 2G, 3G, 4G or 5G), the European Commission opposed the tie-up with the suspicion it would have a detrimental impact on competition in the country.
With the drive towards 5G and full-fibre broadband straining CAPEX budgets throughout the industry, the impact is perhaps felt more in countries such as Belgium where populations prevent scale. Network sharing agreements are not uncommon as a means to more efficiently invest, though these are usually focused on specific geographies or limited to 5G expenditure. Other initiatives are usually in countries where the base-level of competition is higher than what is currently in play in Belgium.
While this investigation is underway, Orange and Proximus are able to begin the groundwork for the joint-venture, sending out RFPs (Request for Proposal) or select staff to be transferred for example, though Telenet has presented an interesting case. European regulators are incredibly sensitive to competition, especially in markets where there are only three telcos.