Dutch regulator fines mobile-phone operators

Dutch competition officials have slapped stiff fines on five mobile phone operators for illegally agreeing to cut handset subsidies to phone retailers.

The Dutch competition authority Nederlandse Mededingingsautoriteit (NMa) imposed fines totalling 88 million euros (CDN$143 million) on the operators, claiming they had colluded to establish the size of subsidies for mobile phones at a meeting in July 2001, the authority said Monday in a statement.

“If the operators had individually decided to cut handset subsidies, we wouldn’t have taken action, but because they agreed to do so as a group, this violated competition rules,” said a NMa spokeswoman.

Mobile-phone operators have used handset subsidies to attract new customers, but with many people now owning mobile phones, operators in many parts of Europe have been trying to slash the costly subsidies.

The collusion fines are among the highest yet in Europe.

The largest penalties went to the largest Dutch operators, KPN Mobile NV and Vodafone Libertel NV, which were fined 31.3 million euros and 24 million euros respectively.

Ben Nederland NV, a unit of Deutsche Telekom AG, was fined 15.2 million euros, while Dutchtone NV, a unit of France Telecom SA, was fined 11.5 million euros and O2 (Netherlands) NV, a unit of MmO2 PLC of the UK, was fined 6 million euros.

NMa expects most of the operators to challenge the decision, forcing Dutch courts to take action, according to the competition authority’s spokeswoman. “If the courts get involved, a decision could take between one and two years during which time the operators don’t have to pay the fines,” she said.

Collusion among mobile-phone operators has become a serious concern for European regulators who, in addition to handset subsidies, have been looking into what they view as excessive fees for international roaming calls and connecting calls from fixed-line networks to wireless networks.