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Telenor Hit with NOK 788 Mn Competition Fine

Norway’s Competition Authority has fined Telenor NOK 788 million (EUR 83.5 million) for abusing its dominant position on the Norwegian mobile market. Competition Authority director general Lars Sorgard said the regulator concluded that Telenor created barriers for the development of a third mobile network in Norway, which is a serious infringement of competition law. Telenor said it disagrees with the fine and plans to appeal.

Norway used to be one of very few countries in Europe with only two mobile operators with their own nationwide networks, with Telenor as the dominant player. Other operators had to rent access to either Telenor or Telia’s network, so the development of a third mobile network was key to achieving increased competition in this market, said the authority.

In 2007, Network Norway started constructing a third mobile network together with Tele2. During the roll-out, Network Norway bought access to Telenor’s network in areas where the third mobile grid did not yet have coverage. In 2010, Telenor changed the terms of its network access agreement with Network Norway, cutting the cost for the actual use of Telenor’s network, but at the same time introducing a fee that increased with the number of Network Norway’s end-users. This fee was a cost that Network Norway could not avoid by increasing the use of its own network.

This reduced Network Norway’s incentives to continue the roll-out of the third mobile network, says Director Gjermund Nese. The competition authority has established that Telenor introduced the amendments to the network access agreement with the intention of limiting further investments in the third network, says Nese.

The fine of NOK 788 million is the highest penalty ever imposed by the Norwegian Competition Authority and reflects the seriousness of the breach, said Sorgard.

Telenor Norway CEO Berit Svendsen said the operator can go to the Competition Appeals Board and later to the courts. There is a six-month window to file an appeal, and Svendsen said the operator will take this time to go over the matter, but is likely to go ahead with an appeal. – Telecompaper

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