Vodafone 2016 Annual Report Download - page 186

Vodafone Group Plc
Annual Report 2016
184
Regulation (continued)
Unaudited information
In February 2016 Ofcom released its initial conclusions following its
Strategic Review of Digital Communications. Ofcom’s proposals include
requirements on BT to open up its network to competitors, reforming
BT Openreach’s governance and delivering better Quality of Service
for all customers. Vodafone UK will continue to engage with Ofcom
as it implements these proposals including a consultation on Openreach
governance expected in summer 2016.
Spain
The nes applied to Telefónica, Orange and Vodafone Spain
in December 2012 for abuse of dominant position by imposing
excessive pricing of wholesale SMS/MMS services on mobile virtual
network operators (‘MVNO’), remain suspended until the judicial review
is concluded.
In June 2015 in response to the national competition authority’s
(‘CNMC’) conditional approval of Telefónica’s acquisition of pay-TV
operator Distribuidora de Televisión Digital (‘DTS’), Vodafone Spain
appealed to the National Court. The appeal required the adoption
of precautionary measures to increase the amount of premium content
made available to other operators from 50% to 75% and to include
football within the same pricing mechanism as other premium content
channels. The National Court rejected the adoption of the precautionary
measures on 18 April 2016.
In January 2016 following a review of the regulatory ex ante price
squeeze test run on Telefónica’s retail offers, CNMC issued a draft
decision that proposes to modify the test to ensure it is capable
of being replicated by other operators. This was further to Vodafone
Spain’s submission to CNMC’s surveillance procedure that called
for action on the retail offers of Telefónica; the wholesale conditions
of access; and the breach by Telefónica of its commitments.
In October 2015 DGCOMP approved Orange’s proposed acquisition
of Jazztel, based on an agreement that included, among other
provisions, the commitment to sell a certain amount of Jazztel’s bre-
optic assets to Masmóvil.
In January 2016 Telefónica and Mediapro reached an agreement under
which Telefónica acquires the rights to broadcast the beIN Sports
LaLiga channel (Spanish rst division and King’s Cup/Copa del Rey)
and the beIN Sports channel (Champions League and Europa League),
for the seasons 2016/17 to 2018/19, for a total amount of €2.4 billion.
Vodafone Spain challenged the exclusive nature of the agreement and,
after obtaining CNMC’s support, in February 2016 Mediapro initiated
a second round of talks where Vodafone Spain conrmed its interest
to acquire the beIN Sports LaLiga channel on a non-exclusive basis and
the contract for the licence with Mediapro was signed on 5 April 2016.
In March 2016 CNMC approved the resolution on wholesale regulation
of broadband markets (Markets 3a, 3b & 4, including NGA).
Netherlands
The Dutch Government has renewed the existing 2.1GHz licences that
were due to expire by the end of 2016. The renewal is for a period of four
years (2017–2020), and provides an opportunity for a simultaneous
auction with the 700MHz band.
In October 2014 the Court of Appeal (‘CBb’) decided to refer the
ongoing case of termination rates to the European Court of Justice
(‘ECJ’) regarding the legal status of the recommendation to use pure
bottom up long run incremental cost (‘BULRIC’). The CBb will be able
to issue its nal decision once it has received the ruling of the ECJ, which
is currently expected during the second half of 2016.
In February 2016 the Dutch Supreme Court ruled on the Dutch
implementation of the EU Consumer Credit Directive and “instalment
sales agreements” (a Dutch law concept), holding that bundled
“all-in” mobile subscription agreements (i.e. device along with
mobile services) are considered consumer credit agreements.
As a result Vodafone Netherlands together with the industry has
been working with the Ministry of Finance and the Competition
Authority on compliance requirements going forward for such
offers. The ruling also has retrospective effect and a claim has been
submitted by a claims organisation which is currently being reviewed
by Vodafone Netherlands.
Ireland
In February 2016 further to Vodafone Ireland’s successful appeal in the
High Court against the national regulatory authority’s (‘ComReg’) interim
mobile termination rate (‘MTR’) decision, ComReg published a revised
MTR decision. Effective from 1 September 2016 and based on a pure
Long Run Incremental Cost (‘LRIC’) model, the MTR will be 0.84
eurocents per minute. ComReg conrmed that following discussions
with Vodafone Ireland they would drop their appeal to the Supreme
Court. Vodafone Ireland has agreed to accept the new rate and drop the
remaining related challenges outstanding before the High Court.
Portugal
In February 2016 the national regulatory authority (‘ANACOM’)
conrmed the renewal of Vodafone Portugal’s 2.1GHz spectrum
band with increased coverage obligations and additional reporting
commitments but without the requirement of an auction or licence fee.
The expiry date has been extended to 5 May 2033.
In March 2016 ANACOM commenced a consultation into the
3a (Wholesale local access), 3b (Wholesale central access)
and 4(Wholesale high-quality access) markets.
Romania
In November 2015 the national regulatory authority (‘ANCOM’)
announced their decision to deregulate the wholesale local access
market (market 3a/2014), removing all of the xed wholesale access
regulations previously imposed on Telekom Romania, the former
incumbent. ANCOM’s analysis concludes that the retail broadband
market in Romania is competitive and ex ante regulation at the
wholesale level cannot be justied. The decision was unopposed
by theEuropean Commission.
Greece
In December 2015 Vodafone Greece’s spectrum (2x56MHz) at 2.6GHz
band licence expired. To date, we await the Ministry of Infrastructure,
Transport and Networks (‘MITN’) to take the appropriate action for
renewal, in the meantime Vodafone Greece continues to have access
to the spectrum.
The MITN and the national regulatory authority, (‘EETT’ – where
currently the role of Chair is vacant) have not commenced the formal
procedure to determine price and the award process prior to the
August 2016 expiration date of Vodafone Greece’s 2x15MHz spectrum
at 1800MHz.
Czech Republic
In June 2015 the former xed incumbent (O2 Czech Republic) was
split into two legally separate entities (network and service company)
but both entities are still controlled by the private investment fund PPF.
In February 2016 further to the national regulatory authority (‘CTU’)
consultation on the unsold 1800MHz and 2.6GHz spectrum from 2013,
an auction was announced with bidding commencing in April 2016.
The auction for the 3.7GHz spectrum is due to commence in the second
half of 2016.
Hungary
Vodafone Hungary has no material items to report for 2016.