Cartel probe into division of Sweden's 4G network

The Swedish Competition Authority (Konkurrensverket) is looking into whether the division of the Sweden's new 4G network by the country's five big mobile operators may have been an attempt to exclude other players from entering the market.

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The partition of the network took place in November 2008 through an agreement generally referred to as a “frequency pact”.

At that time, the five mobile giants involved, TeliaSonera, Telenor, Tele 2, Swefour and Three, presented an agreement regarding how Sweden's 900 Mhz bandwidth would be divided.

However, the so-called “frequency pact” has been called questionIn by operator Ventelo, which reported the arrangement made through the Swedish Post and Telecom Agency (PTS) to the EU commission in the spring of 2009.

The move provoked a succession of critical questions from Brussels, leading the Swedish government to order an investigation of the pact by the Competition Authority.

According to the magazine Computer Sweden, the investigation is still ongoing.

“Market division is particularly serious type of infraction. Within their agreement, the operators have refrained from competing over a valuable commodity. In addition, the agreement implies that the entirety of the 900 MHz bandwidth will be shared amongst the five largest companies with telecommunications in Sweden”, writes the Competition Authority.

In addition, the agency believes the pact hinders current and potential competition, including competitors from other EU member states, from entering the Swedish market for the next 15 years.

Sweden's Ministry of Enterprise, Energy and Communications (Näringsdepartementet) is due to provide the EU commission with an response by mid-October.

Should their findings indicate that the agreement stands in violation of EU regulations, the licensing distribution process will have to be redone.

The investigation covers not only how the frequency division was made, but also poses questions as to whether the five operators are guilty of illegal cartel building during the course of their collaboration.

“We are investigating whether the cooperation was in breach of competition laws, whether it imposes limits on the competition,” Staffan Martinsson of the Swedish Competition Authority told the TT news agency.

If the mobile operators end up in court for illegal cartel building, they can expect to pay hefty fines.

”That might be the case, but I don't want to speculate right now,” said Martinsson.

In the most extensive case of cartel building to come to light in Sweden, several companies were found guilty of dividing up the Swedish asphalt market.

The total fines amounted to 200 million kronor ($29 million).