BUSINESS IN SHORT

Telekom to face stiff fine

EU ANTITRUST regulators are set to fine Deutsche Telekom and its subsidiary Slovak Telekom after the August summer break for charging unfair wholesale prices in Slovakia.

EU ANTITRUST regulators are set to fine Deutsche Telekom and its subsidiary Slovak Telekom after the August summer break for charging unfair wholesale prices in Slovakia.

“The Commission is likely to fine the companies after the August summer break, in September,” said an unspecified source, as quoted by Reuters, on June 24, adding that there was a slight chance the decision could be issued next month.

According to the European Commission, Deutsche Telekom is considered liable because it holds a 51-percent stake in Slovak Telekom. The Slovak government owns the remaining 49 percent. Several sources told the Sme daily in the past that the fine could climb to €100-200 million. The fine, however, can only amount to one-tenth of the operator’s sales at the most, Sme reported.

Deutsche Telekom’s income reached €60 billion, while Slovak Telekom earned around €827 million in 2013. However, it is not yet clear whether the companies should be punished together or separately. The EC and Deutsche Telekom refused to comment on the situation, as did Slovak Telecom and its 34-percent owner, the Economy Ministry, the SITA newswire reported.

Slovak Telekom came under EU scrutiny back in 2009 when EU inspectors with police raided its premises in Bratislava over suspicions of possible violation of EU competition rules, for which the company was charged three years later, according to Sme.

As a former state monopoly, Slovak Telekom has to rent its network to smaller alternative operators. However, the company allegedly imposed on them technical terms which were difficult to fulfil, and which limited their business.

The Slovak Antitrust Office also imposed a €29-million fine on Slovak Telekom for creating hard conditions for operators which were paying for Telekom’s telephone wiring from 2002 to 2005. The Supreme Court however removed the charge in 2011.

This year Slovakia has started a process of selling its shares in Slovak Telekom. In a memorandum on cooperation in privatisation, the state promised Deutsche Telekom that it would do the maximum to mitigate the effects of the commission’s fine on the sale.

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