Stampa

TIM-OMNITEL TARIFFE FISSO MOBILE


PRESS RELEASE



PRESS RELEASE

Tim and Omnitel fined 150 billion lire for serious anti-competitive conduct on the mobile telephone market


The Competition Authority, at 28 September 1999 meeting, at the end of an investigation that began on 7 January 1999, ruled that Telecom Italia Mobile S.p.A. and Omnitel Pronto Italia S.p.A. had concluded agreements that seriously distorted competition on the mobile communications services market, in violation of section 2 of the Competition Act.
In view of the gravity of the offence, the companies were fined a total of 147 billion lire.

It had found, firstly, that TIM and Omnitel had concluded an agreement in 1998 in the form of a concerted practice, to set identical price structures and levels for their fixed-to-mobile calls. Fixed-to-mobile calls accounted for about 40% of the 1998 revenues of each company investigated, giving them an aggregate turnover of about 5,000 billion lire. It emerged in particular that the prices fixed by the two companies, which were anomalous in terms of their structure (business and family)and were particularly high in comparison with corresponding European standards, particularly at peak times (7:30 a.m. to 8:30 p.m. on weekdays) for family code numbers, guaranteed high profit margins to the service providers and increased the cost to Italian consumers in comparison with the European average, which in 1998 alone was estimated to be in excess of 650 billion lire.

Secondly, on the eve of the overhaul of the regulatory system which would have given Telecom Italia, as the land-line carrier, the responsibility for setting the charges for the services after 1999, and in order to maintain their current income level from fixed-to-mobile telephone services, on their own admission TIM and OPI then concluded another agreement, redefining and agreeing identical prices for fixed-to-mobile calls, effective in both instances as of 6 January 1999.

Thirdly, the Competition Authority ascertained that TIM and OPI had coordinated their conduct in their dealings with other new fixed and mobile telecommunications service providers. Both companies had implemented an agreement, in the form of a concerted practice, to set the same connection prices with their own mobile networks, thereby raising costs and limiting the entrepreneurial independence of new market entrants, and hence reducing the advantages of liberalization to the general public.

The anti-competitive conduct on the part of TIM and OPI was judged to be particularly serious because both companies implemented horizontal price-fixing agreements in 1998, when 1998, accounted for the whole mobile communications services market. Bearing these factors in mind, the Competition Authority decided to impose the following fines on each company:        
-        for the price-fixing agreements for the fixed-to-mobile communications services in 1998, 1.8% of the turnover from the services forming the subject-matter of the agreement;
-        for the 6 January 1999 agreement, 1% of the same turnover;
-         for the concerted price-fixing for network connections, 1% of the turnover from the services forming the subject-matter of the agreement.

This brought the total fines imposed to 100,432,000,000 lire for TIM and 46,868,000,000 lire for OPI.


Rome, 1 October 1999