The mobile market in the Czech Republic is dominated by three main network providers – O2, T-Mobile and Vodafone – which take 96.4 percent of the market share. This lack of competition is the main reason retail prices for mobile services in the Czech Republic are the highest in the EU, according to an analysis by the Czech Telecommunications Authority, a regulator of the telecommunications sector. According to the report, a gigabyte of data in the Czech Republic is 201 percent more expensive than the EU average, and mobile services are 150 percent more expensive overall.
According to a previous statement by the Ministry of Industry and Trade, the price of mobile data in the Czech Republic has increased tenfold since 2011, but is still the highest in the EU. “Even if there is some decline in retail prices in the medium term, prices in other EU countries are falling faster than here,” states the authority in its report. A problem that Hana Továrková, Chairwoman of the Board of Directors, sees as a solution in regulation.
“The CTA aims to introduce price regulation to make room for more virtual operator development. Price regulation would significantly affect wholesale prices, which in turn would affect retail prices, which unfortunately are still the highest in Europe.”
The Czech Telecom Authority intends to regulate the market by setting price caps and imposing an obligation on major network operators to allow virtual operators access to their wholesale mobile services at a regulated price. A regulated wholesale price would allow virtual operators to replicate and compete with mobile network operators’ offers, says Ms. Továrková.
Currently, smaller virtual mobile operators have to rent infrastructure from the big carriers while controlling only a fraction of the market. Although there are 125 virtual operators in the country, their share is only 3.6 percent.
This analysis by the Telecom Authority is updated after the European Commission rejected three previous proposals to regulate the Czech wholesale mobile data market. The EK justified its rejection by stating that the analyzes had not proven any anti-competitive joint action by the three mobile network operators. However, the EC recognizes that there is a problem, says Ms. Továrková.
“For us it is very important when we talk about more digitization to have the possibility to have the wholesale prices and the retail prices at the right level so as not to be too expensive. The problem remains that the European Commission is still considering how to solve the problem not only in our country but also in other countries with very high prices.”
This updated analysis aims to take account of the Commission’s comments and respond to its objections. Mobile operators have until September 19 to comment on the analysis.
