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11 12 2003

The Competition Council of the Republic of Lithuania examined the notification of “TeliaSonera AB” of September 2, 2003 on intended merger through its subsidiary “Amber Mobile Teleholding AB” by acquiring up to 90 per cent of interest in UAB “Omnitel”. The Competition Council passed a resolution to authorise the merger subject to certain conditions and obligations to be assumed by the merging party. Such reservations were provided for in order to avoid the strengthening of the dominant position in relevant markets.

The Resolution of the Competition Council provided for a condition that UAB “Omnitel” may be reorganised by taking over of or merging with AB “Lietuvos telekomas”, or any other undertaking directly or indirectly controlled by “TeliaSonera AB”, only provided it files an advance notification to and obtains the relevant permission from the Competition Council. Unless authorised by the Competition Council AB “Lietuvos telekomas” shall not transfer its activities (customer contracts) related to the provision of telecommunications services via the fixed public telephone network to UAB “Omnitel”, unless in the manner provided by laws UAB “Omnitel” is subject to regulatory obligations applicable to undertakings exercising a significant influence in the relevant telecommunications market. Seeking to ensure the transparency of operations in the provision of telecommunication services by the fixed public telephone network and the mobile telephone network UAB „Omnitel“ was obligated to conduct a segregated accounting of costs incurred in relation to the provision of services by the fixed public telephone network.

The Competition Council decided that “TeliaSonera AB” must ensure that AB “Lietuvos telekomas” and UAB “Omnitel”, including other directly and indirectly controlled undertakings providing the telecommunications services in the Republic of Lithuania comply with the effective legislation and implement the non-discriminatory clause, in particular, for the purpose of conclusion of agreements on network interconnection and network access.

The Competition Council concluded that the intended merger is a strengthening vertical integration between the said undertakings in Lithuania and as horizontal merger modifying the degree of concentration in relevant telecommunications markets. “Amber Mobile Teleholding AB” which is acquiring the shares of UAB „Omnitel“ is a subsidiary fully owned by “TeliaSonera AB”. In its decision of July 2002 to authorise „Tele AB“ to effect concentration by acquiring “Sonera Corporation” the Competition Council also provided for a condition that “Telia AB” shall refrain from strengthening its control of UAB “Omnitel” unless in advance authorised by the Competition Council. „Amber Mobile Teleholding AB” could increase its 55 per cent share in UAB „Omnitel“ to 90 per cent interest by acquiring a block of 35 per cent of shares from “Motorola Lithuania Telecom, Inc.”. Following the merger UAB “Omnitel” will no longer by jointly controlled by “Motorola Lithuania Telecom, Inc.” but rather fully and solely controlled by “TeliaSonera” AB. In Lithuania “TeliaSonera” owns 60 per cent of shares of AB „Lietuvos Telekomas“ through “Amber Teleholding A/S”.

The Resolution of the Competition Council to authorise the intended merger subject to certain conditions and obligations was passed having established that AB “Lietuvos telekomas” holds a dominant position in certain relevant services markets, and holds a significant share in other relevant markets. UAB “Omnitel” holds a very large market share in the mobile telecommunication market and the market for inter-network services of mobile communications. The changes in the degree of concentration are effected in the relevant telecommunications and information technologies markets which had created or strengthened the dominant position and significantly restricted competition. By strengthening the degree of control over “UAB “Omnitel”, TeliaSonera AB” will ensure the possibility to realise a complete coordination of actions of the said companies and, presumably, the status of the companies in the relevant markets will strengthen. Having regard to all the above circumstances the Competition Council authorised the merger subject to certain conditions and obligations.

Competition Council Spokesperson