TELECOM ITALIA/MEGABEAM ITALIA
PRESS RELEASE
PRESS RELEASE
TELECOM-MEGABEAM: THE COMPETITION AUTHORITY HAS AUTHORISED THE MERGER, SUBJECT TO SPINOFFS. TELECOM ITALIA MUST GIVE UP ALL ITS EXCLUSIVE RIGHTS AND ACCEPT THE ROAMING OBLIGATION IN THE WI-FI SECTOR.
At its meeting on 7 August 2003 the Competition Authority resolved to authorise the merger between Telecom Italia and Megabeam, subject to a number of specific conditions including the spinoff of all the wi-fi activities of both companies.
The takeover of Megabeam examined by the Authority was considered likely to give Telecom Italia a dominant position on the nascent domestic Wi-Fi (Wireless Fidelity) services market, strengthen Telecom Italia's already dominant position on the local broadband access and connectivity services markets and the supply of broadband Internet access services to the end-user.
In order to preempt these anti-competitive effects, the Authority has made authorisation to proceed with the takeover conditional upon the adoption of the following measures:
a) all the current exclusive rights vested in TELECOM ITALIA and MEGABEAM must be waived, whether they relate to the provision of Wi-Fi services, the installation of R-LAN (radio local area network) infrastructure or the use of existing R-LAN networks belonging to other companies. This obligation will also apply to any new agreements relating to the same activities that TELECOM ITALIA might conclude in future;
b) all the activities relating to the supply of TELECOM ITALIA Group Wi-Fi services, including those currently provided by MEGABEAM, must be spun-off to different companies;
c) roaming contracts must be concluded on fair and non-discriminatory technical and financial terms and conditions, consistently with the principle of equality of treatment between the TELECOM ITALIA Group subsidiaries and related companies and other operators, so as to guarantee the coexistence of several technically and economically viable authentication systems based on established standards for which an agreement exists between more than one operator.
These conditions will make it possible to provide other Wi-Fi service-providers with full direct and indirect access to the TELECOM ITALIA Group sites, and guarantee transparency in relations between the activities of the TELECOM ITALIA Group Wi-Fi services and the Group's other fixed telecommunications business.
The measures identified by the Authority will also ensure that the operation does not give the TELECOM ITALIA Group any structural advantages and enable it to condition the competition, thereby strengthening its dominant position on the local broadband access services and connectivity supply markets and the market for the supply of broadband Internet access services to end-users, and creating a dominant position on the market for new public Wi-Fi services.
Rome, 8 August 2003