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Notification of industry agreement on price calculation principles when paying for the joint use of pylons, less than 50 meters tall, for radio communication purposes

29. oktober 2003

Journal nr. 3/1120-0301-266/ISA/tph The Council meeting 29. October 2003

Summary

1. The Danish Telecommunication Industry (TI) has notified the Danish Competition Au-thority of an industry agreement on price calculation principles when paying for the com-mon use of pylons, less than 50 meters tall, for radio communication purposes.

2. Included in the notification is an application for exemption, for not less than a 5 year pe-riod, under section 8 of the Competition Act.

3. The industry agreement has been entered into by 6 large telecommunications enter-prises. The agreement has been drafted as a partial substitution of previous agreements made in connection with the Pylons Act.

4. The objective of the industry agreement is to set out standard principles for the calcula-tion of the individual pylon owner’s standard price offer when hiring out one capacity unit on a pylon less than 50 meters tall. The parties expect that the agreement will lead to a 25-30 percent drop in the average price on the market for hiring out pylons between opera-tors. However, the Competition Authority finds that these cost reductions are solely the results of a more efficient common use of pylons due to the introduction of 3G technology.

5. The agreement has been arranged as a consequence of one of the new operators on the market, HI3G, who found that the present price level was too high, approaching the Minister for Science, Technology and Innovation. Instead of regulating the area through executive order, the Minister requested that the industry it self drew up new price calcula-tion principles.

6. It is stated in the information note, with reference to section 6 (1) of the Competition Act, that the agreement is limiting competition, as both the purpose and the consequence of the price calculation principles in the agreement is assessed to be limiting the competition in the area, even though these price calculation principles in actual cases can be deviated from for the benefit of the hirer.

7. Furthermore, it is concluded that the agreement can be exempt for 3 years according to section 8 (1), cf. section 8 (3) of the Competition Act.