Why do Czechs pay the most in the EU for mobile data?
The mobile services market in Czechia is dominated by three main network providers – O2, T-Mobile and Vodafone – which hold 96.4% of the market share. This lack of competition is the main reason why retail prices for mobile services in Czechia are the highest in the EU, according to an analysis by the Czech Telecommunications Authority, a regulator of the telecommunications sector. The report says a gigabyte of data in Czechia costs 201% more than the EU average, and mobile services are 150% more expensive overall.
According to a previous statement from the Ministry of Industry and Trade, the price of mobile data in Czechia has increased tenfold since 2011. Yet it remains the highest in the EU. “Even if there is some decline in retail prices in the medium term, prices in other EU countries are falling faster than here,” indicates authority in its report. It’s a problem to which Hana Továrková, chair of the body’s board, sees regulation as the solution.
“The CTA aims to introduce price regulation to create space for further development of virtual operators. Price regulation would significantly affect wholesale prices, which in turn would influence retail prices, which are unfortunately still the highest in Europe.
The Czech Telecommunications Authority wants to regulate the market by setting price caps and imposing an obligation on major network providers to allow access to their wholesale mobile services to virtual operators at a regulated price. A regulated wholesale price would allow virtual operators to replicate the offers of mobile network operators and compete with them, explains Ms Továrková.
Currently, small mobile virtual operators must lease infrastructure from large network providers, while controlling only a fraction of the market. Although there are 125 virtual operators in the country, their share is only 3.6%.
This analysis by the Telecommunications Authority comes in an updated form, after the European Commission rejected three previous proposals to regulate the Czech wholesale mobile data market. The EC stated as a reason for its rejection that the analyzes did not prove that the three mobile network operators were acting in concert to restrict competition. However, the EC recognizes that there is a problem, says Ms Továrková.
“For us it is very important, if we are talking about more digitization, to have the possibility of having the wholesale prices and the retail prices at the right level, not to be too expensive. The problem remains that the European Commission is still considering how to solve the problem, not only in our country, but in other countries where prices are very high.
This updated analysis aims to take into account the EC’s comments and respond to their objections. Mobile operators have until September 19 to comment on the analysis.