LIETUVOS TELEKOMAS OBLIGATED TO SELL UAB MICROLINK LIETUVA

In its sessions the Competition Council examined the notification submitted on 23 June 2005 by one of the largest Estonian telecommunications and information technologies service provider Elion Ettevõtted AS. The submission notified of the intended concentration by acquiring a 100 percent shareholding of MicroLink AS. Upon the implementation of the transaction in Lithuania AB Lietuvos telekomas will acquire subsidiaries of MicroLink AS operating in Lithuania. The authority passed the decision to authorise the notified concentration subject to certain obligations and conditions.

Elion Ettevõtted AS is part of the entity group controlled by TeliaSonera AB that also owns several entities in Lithuania. Therefore, while passing the decision to authorise the concentration the Competition Council in all respects assessed the circumstances that will affect the telecommunications and information technologies sectors. The Competition Council assessed the concentration deal under consideration as vertical and horizontal in the retail Lithuanian market of broadband access. The Competition Council specifically considered the fact that AB „Lietuvos telekomas whose 60 percent shareholding through a subsidiary is held by TeliaSonera AB is a sole wholesale broadband access provider in Lithuania, operating a well-developed fixed telecommunications line network and the infrastructure; furthermore, the company holds a dominant position in the leased lines market, and, in addition to quite a number of other advantages is in the process developing alternative internet access and data transmission technologies. The Competition Council concluded that following the concentration through the acquisition of its competitor AB Lietuvos telekomas would strengthen its market position. Although UAB MicroLink Lietuva’s market share is insignificant, it is nevertheless one of the major Internet and data transmission services provider in Lithuania. Due to the concentration transaction AB Lietuvos telekomas would strengthen its position in the market and in connection with other related undertakings could restrict competition in the relevant Lithuanian retail market for broadband access. Meanwhile its competitors managing networks of much lower penetration rate have less possibilities to increase their market shares.

Acting in accordance with the provisions of the Law on Competition the Competition Council authorised Elion Ettevõtted AS to implement concentration by acquiring a 100 percent shareholding of MicroLink AS, however, obliging AB Lietuvos telekomas to sell UAB MicroLink Lietuva within an established time limit to an undertaking unrelated with Elion Ettevõtted AS, AB Lietuvos telekomas, or MicroLink AS. The timeframe set for the execution of the sale transaction is not disclosed.

In order to secure the image of the entity that is being sold, maintain its competitiveness, trade marks and other acquired rights, the Competition Council imposed an obligation to ensure the continuity of the contracts concluded with the business partners and customers. Within the period of the sale transaction AB Lietuvos telekomas is obligated to ensure non-discriminating terms in the provision of the broadband access to all recipients of the service. The Competition Council will be kept regularly informed of the course of the MicroLink Lietuva sale transaction in order to enabled to assess, in due time, the possibilities of the potential buyer to effectively compete in the Lithuanian retail market of the broadband access and approve the potential buyer.