After having “serious doubts” in December and after conducting an in-depth investigation, the Commission decided to block PTS’ (Post- och telestyrelsen) market analysis in fibre networks in Sweden. The Commission published its decision on 7 February 2020. In particular, the Commission found that PTS’ analysis of geographic markets was not adequate.
To put it shortly, PTS defined the geographic market as national, ie. the whole of Sweden formed one geographic market, and found Telia to have SMP in that market. Further, PTS imposed a set of remedies, including access and price control, to apply in all parts of Telia’s fibre network. This was done despite the fact that the Swedish fibre market is exceptionally fragmented with the presence of around 180 local, municipality-owned, fibre operators.
The Commission underlines that Telia’s market position differs significantly across Sweden. Telia has a strong presence in 60 municipalities, supplying 80% of connections, while municipal networks have a strong presence in 77 municipalities, supplying more than 80% of connections. PTS’ SMP designation was largely based on Telia’s national market share, 37%, and Telia’s role as the biggest player at a national level. PTS thus failed to see the change in the market dynamics and emergence of alternative players after switching from copper to fibre. A more granular definition of geographic markets might have led to substantially different conclusions on relative strengths of different market players.
PTS now needs to re-assess the Swedish fibre market in a more consistent manner. As the Commission put it: “PTS should undertake a more detailed and granular assessment of the geographical market. The geographic market definition naturally impacts the assessment of SMP and the remedies to be imposed.”