TEO LT, AB AUTHORISED TO IMPLEMENT THE CONCENTRATION DEAL SUBJECT TO OBLIGATION

Having examined the notification on the intended concentration filed on 30 October 2007 by the incumbent telecom operator TEO LT, AB by acquiring a 100 holding in the digital TV company UAB Nacionalinė skaitmeninė televizija the Competition Council resolved to authorise the concentration in accordance with the submitted notification subject to certain obligation. TEO LT, AB was obligated within one month from the publication of the operative part of the Resolution of the Competition Council in the supplement Informaciniai pranešimai of the national Official Gazette to introduce and ensure the separate accounting of the digital television services.

Having assessed that the anticipated concentration deal in the first place is related to the intention of TEO LT, AB to develop the digital ground TV rebroadcasting business, the Competition Council assessed the deal as the vertical and horizontal concentration in the relevant Lithuanian market for the retail pay-TV services. In terms of the nature of the services provided this market is closely related to the wholesale TV signal transmission market in Lithuania. Although the degree of concentration in the relevant retail pay-TV services market is being changed to just a negligent extent, the Competition Council took into account the outlook of the development of the TV services. Having considered that TEO LT, AB is currently operating a well developed fixed telephone network and the fixed data transmission infrastructure with the Lithuania-wide coverage, furthermore the company is dominant in the broad band access and the leased line service market, TEO LT, AB, in cooperation with other associated undertakings is developing the alternative internet access and data transmission technologies, it was concluded that following the concentration the company will potentially cover a more significant share of the relevant market for the retail pay-TV services market. Furthermore, while developing the new digital television services and networks, TEO LT, AB with associated undertakings has a potential to strengthen its position in certain telecommunications and information technologies services markets.

Seeking to prevent cross-subsidising of services and abuse in fixing the price for  the services, including the digital television services to be provided, and considering that after the concentration TEO LT, AB will avail itself to the potential to strengthen its position in certain markets, also that the company will be operating as both the TV signal transmitter and the TV program re-broadcaster the Competition Council established that the operations related to the digital television service provision need to be strictly separated. With that in view the retail terrestrial television services need to be retained managing its segregated revenue and cost accounts. Furthermore, the company was obliged to ensure a segregated revenue and cost accounting of all other digital television services including the wholesale terrestrial television broadcasting and the IPTV services.