Cosmote Buys Zapp, Orange Notifies ANCOM, Competition Council

• Cosmote Romania has recently acquired full control over competitor Telemobil

• Orange Romania believes that the RomTelecom - Cosmote group could concentrate too many licenses and thus dominate the mobile communications market, just as they dominate the fixed communications market through the local loop

• Orange expects ANCOM and the Competition Council to solve the matter of the CDMA licenses and the local loop

Cosmina Capalău

The takeover of mobile telephony company Telemobil (Zapp) by Cosmote Romania has sparked prompt reaction on the market as Orange Romania, represented by Marketing Manager Dorin Odiatiu cautioned the Competition Council and the National Communications Administrative and Regulatory Authority (ANCOM) regarding the deal.

"We see that this consolidation has placed the RomTelecom - Cosmote Group in control of significant spectrum resources, of which I would mention both CDMA licenses in Romania and a 3G license," said Odiatiu. "Accumulating so many licenses will enable RomTelecom - Cosmote Group to dominate the mobile communications market in addition to the dominant position they already have on the fixed communications market, where they control the local loop," he added. He looks forward to a near-future solution to the matter of the CDMA licenses and the local loop from the ANCOM and the Competition Council.

• ANCOM: "Whatever competition issues may appear will be reviewed by the Competition Council"

"ANCOM does not have any details regarding the takeover of Telemobil (Zapp) by OTE (Cosmote). We do not know what type of transaction was concluded between the two companies or what the shareholders will decide about the two operators. It is therefore premature to take an official stance on this transaction," said Catalin Marinescu, President of the National Communications Administrative and Regulatory Authority (ANCOM). "Whatever competition issues may appear will be reviewed by the Competition Council, which is the relevant authority in such cases. In this particular case, the transaction will be notified to the Competition Council and they will decide if it has the potential to affect fair competition on the Romanian market," Marinescu added.

"Regarding the accumulation of licenses following this transaction, the legal framework in the communications industry does not prohibit the aggregation of the licenses held by the two operators if the two companies decide to merge. In such case, Cosmote will take over all the obligations stipulated in Zapp"s license. According to the law, the new holder of the license will have all the rights and obligations of the former holder," ANCOM President Catalin Marinescu concluded.

In turn, Competition Council officials told BURSA that "after the transaction is signed, the two companies have 30 days to notify the Competition Council. So far, we have no knowledge of such notification. We will analyze it when we receive it."