Commission, March 24, 2021, No M.10087

Dear Sir  or Madam,

(1)    On 17 February 2021, the European Commission received notification of a proposed concentration (“the Transaction”) pursuant to Article 4 of  the  Merger  Regulation  by which Proximus, NV/SA (“Proximus”) and Nexus Infrastructure, S.à  r.l. (“Nexus”, together with  Proximus,  the  “Notifying Parties”) acquire, within  the  meaning of   Articles 3(1)b and 3(4) of the Merger Regulation, joint control  over  a  joint  venture  Nexus Fiber BV  (the  “JV”).3  Proximus,  Nexus  and  the  JV are collectively referred  to as “the  Parties”.

1. THE  PARTIES 

(2)    Proximus is the  incumbent  telecommunications  operator  in  Belgium.  It  is  active  in  a  full  range  of  electronic  communications  services providing  wholesale  and  retail services, fixed and mobile  telecommunications,  voice  and  data  services, mainly  at national  level  within  Belgium.  Proximus  is   listed   on  the   Brussels   Stock  Exchange. The Belgian State owns 53.5% of  Proximus’  shares,4  Proximus  owns  4.5%  of  its  shares  and 42% of Proximus’   shares  are publicly traded.

(3)    Nexus  (previously  called  “Delta   Fiber  Belgium”)   is   a  special  purpose  vehicle   with no other current business activities than its use as a holding for  purposes  of  the Transaction. Nexus is part of the EQT group (“EQT”) and  is  indirectly  controlled  by EQT Fund Management  S.à  r.l.  EQT  is  a  global  integrated  alternative  investments firm,  which  amongst  other  things, invests  in  infrastructure  and  infrastructure-related assets and businesses   primarily  in  Europe  and North America.

(4)    The JV5 will roll out and operate a dense passive6 open point-to-point Fiber-To-The- Home   (“FTTH”)   network7    in  certain  parts  of  the   Flanders  Region  of  Belgium  and offer access services to its network infrastructure to  telecommunication  operators,  including  Proximus.   This   will   allow   Proximus   and   other   telecommunications operators to provide  (i)  retail  services  to  residential  and  business  customers,  as  well  as (ii) wholesale active network infrastructure access services. The JV itself  will  not  operate at the retail  level  or provide  any  active  wholesale   access services.

2. THE   OPERATION   AND CONCENTRATION

(5)    The main objective of the Transaction is for Proximus and Nexus, through the  JV,  to enlarge and accelerate the rollout of FTTH in the Flanders region of Belgium in a cost-efficient way. There is  a  rather  low  level  of  fiber  penetration  in  the  Flanders region compared to other Member States,  owing  to  the  exceptionally  strong  penetration of cable-TV networks  and  the  significant  investments  that  were  made  in  the traditional copper network to enhance it with xDSL-technologies and techniques. Accordingly, end of March 2020, Proximus announced its ambition to accelerate its deployment plans to bring fiber to 2.4 million homes  by  2025  (instead  of  2030),  notably  via  the conclusion  of partnerships   with  third  parties  such  as Nexus.

(6)    The JV will develop and deploy its  own passive  FTTH-infrastructure  and  will  offer  a new  and  additional  choice to  interested   operators  and  service  providers.  According to the Notifying Parties, the network  and  services  provided  by the  JV will  be  neutral and non-discriminatory to ensure access for all interested operators and to enhance competition  on the  relevant   electronic   communications   downstream markets.

(7)    On 26  November  2020,  the  Notifying  Parties  signed  a  Subscription and Shareholders’  Agreement   (“SSHA”).

2.1. Joint control

(8)    Proximus and Nexus will respectively be allotted 49.9% and 50.1% of the JV’s share capital and will each have the ability to  exercise decisive  influence  over  the  JV. Therefore, they exercise joint control over the JV. In particular, the  JV’s  Board  will consist of six Board members (“directors”) and  the  Notifying  Parties  will  each  be  entitled  to  nominate  three directors,  including  the   Chairman   nominated   by  Nexus. The Chairman has a casting vote in case of a  deadlock  situation,  however  this  only relates to matters that are not “Board Reserved Matters” or “Shareholder Reserved Matters” (i.e. the casting vote is only relevant in  relation  to  matters  not  related  to the JV’s strategic   business  behaviour).8

(9)    In relation to the strategic  business  behaviour  of the  JV,  each of the  Notifying Parties  has veto rights that  enable  them  to  exercise  decisive  influence.  First,  the  appointment  of senior management (including  the  CEO,  finance director,  operations  director, business development director and construction director) must be unanimous by  the Board.9 Second,  the  Notifying  Parties  have  jointly  developed  and  agreed  on  a Business   Plan,   which  can  only  be  amended   by  the   shareholders  as  a “Shareholder Reserved Matter” in a Shareholders’ meeting.10 A “Shareholder Reserved Matter”  requires a simple majority of  the  votes  cast  by  the  Proximus  shareholders,  and  a  simple majority of the  votes  cast  by  the  Nexus  shareholders,  which  essentially provides each of the Notifying  Parties  with  veto  rights.  Finally,  the  veto  rights  also  relate  to a number  of major  investments   and market  specific  rights.11

(10)   Therefore, as a result of the  Transaction,  Proximus  and  Nexus  will  jointly  control  the JV within  the meaning  of Article  3(1)(b)  of the Merger   Regulation.

2.2. Full-functionality

(11)   The JV will  be  fully  functional. First, the  JV  will  have  its  own  presence  on  the  market independently  from  the  Notifying  Parties.  It  will  have  its  own  management, staff,  assets  and  financial resources  to  conduct  its  business  activities  on  a  lasting basis. The  JV  will  moreover  have  sole  ownership  of  the  FFTH  network.12  Second, the JV will have  activities  beyond  one  specific  function  for  the  parents  as  it  will deploy, run, and market  the  FTTH  network,  and  offer  access  to and passive services  on the FTTH network to operators  based  on the  wholesale  offer  that it  will determine and market to other operators. Accordingly, the JV will take the commercial and deployment risk.13 Third,  as  to  sale/purchase  relations  with  the  parents,  the  network  will be open and neutral meaning that it will be  available  to  all  interested service providers  under non-exclusive  and  non-discriminatory  terms.   Moreover,  the relationship  between  the  JV  and  Proximus  will  be  truly  commercial  in  character,  as the JV will deal with Proximus at arm’s length on the basis of normal commercial conditions.14 Fourth, the JV will operate and market the  network  following  its  construction for a period of minimum […] years, with a tacit renewal of […] years.15 Accordingly,   the  JV is  intended  to operate on a lasting  basis.

(12)   Therefore, the JV  will  be  a  full-function joint  venture  within  the  meaning  of  Article 3(4) of the  Merger Regulation.

3.  EU DIMENSION

(13)   In the last financial year, Proximus and Nexus  achieved  a  combined  aggregate  world-wide turnover  of  more than EUR 5,000  million  (Proximus:  EUR 5,637.9 million; EQT: 27,178.56 million).16 Each of  the  undertakings  concerned  has  an  EU- wide turnover in excess of EUR 250 million (Proximus: EUR [...] million;  EQT: [...] million), but they do not achieve more than two-thirds of  their  aggregate  EU-wide  turnover  within  one and the  same  Member  State.

(14)   The notified operation therefore has  an  EU  dimension  within  the  meaning  of  Article 1(2) of the  Merger Regulation.

4. RELEVANT MARKETS

(15)   Both Proximus and  the  JV  will  be  active  on  the  market  for wholesale  local  broadband access (Section 4.1).  Proximus  is  also  active  on the  (i)  wholesale  markets for central and resale broadband access (Section 4.1) and the supply of leased lines (Section  4.2),  and  the  (ii)  retail markets   for   mobile   telecommunications   (Section 4.3), fixed voice (Section 4.4),  fixed internet  access (Section  4.5),  business  connectivity  (Section  4.6)  and  a  potential retail market  for   multiplay   services (Section 4.7). Nexus, and any other  subsidiary  of  EQT,  is  not  active  in  Belgium  on any of these  markets,  [details  regarding  EQT activities   in  Belgium].

4.1.Wholesale broadband  access

4.1.1. Relevant product market

(16)   Wholesale broadband access (also defined as wholesale access to internet services) includes different types of access to  fixed connections  that allow  internet  service providers to provide services to end consumers.  It  comprises: (i)  physical  access at a fixed location (such as local loop unbundling (“LLU”)17), (ii) non-physical or virtual  network access at a fixed location (such  as  “bitstream”  access),  and  (iii)  resale  of a fixed  provider's  internet   access services  (“wholesale   resale  broadband access”).18

4.1.1.1.   The  Commission’s   previous  practice

(17)  In previous  decisions, including  relating  to  the  Belgian  market,  the  Commission  defined the product  market  as  a  separate  wholesale  broadband  access  market,  and left the question open as to whether it should be subdivided according to  the  type of  access  (i.e.,  LLU,  bitstream  or  resale  (see  paragraph  (16) above)),19   or based on the level where the point of  interconnection  is  situated.20  The  latter connects  the infrastructure of the wholesale provider  and  that  of  the  customer  and  comprises  (i)  local  broadband  access, and (ii)  central  broadband access.21

(18)   The Commission also considered  but  left  open  whether  the  wholesale  broadband access market should be  segmented  according  to  the  type  of  technology  used between (i) stand-alone DSL access22, (ii) stand-alone  cable  access,  and  (iii)  cable access for  all  TV and internet  services.23

4.1.1.2.   The  Notifying  Parties’  views

(19)   The  Notifying  Parties  submit  that the  market  should   be   segmented   between wholesale local and central broadband access. First, the European Commission Recommendation  of  9  October  2014  (“the  2014  Recommendation”)24  defines markets for the purpose of  ex  ante  regulatory  intervention.25 The  2014 Recommendation defines  distinct  markets  for wholesale  local  access at  a  fixed location, which includes LLU as well as virtual products that exhibit functionalities equivalent or comparable to key features of physical  unbundling,  and  for  wholesale central access at a fixed location, which includes bitstream products with certain characteristics (respectively markets 3(a) and 3(b) of the 2014 Recommendation). In relation to the local broadband access market  specifically,  the  Parties  note  that  it includes   both fiber  optic  and copper access.

(20)   Second, according to the Notifying Parties, the Belgian sectoral regulator (“BIPT”) concluded26 that the market for wholesale local access includes the  passive  physical  access and the virtual access to copper and fiber networks at a local level, excluding possible  forms   of  local  access  on  the   cable  networks  and  access  to   Fiber-to-the-Office (“FTTO”).27 Proximus is the only supplier in  Belgium  on  this  market  at  the national level. Proximus however  considers  that  other  forms  of  local  access  (notably on cable networks) and  other  players such  as  Eurofiber  and  Fluvius, should  be included in the same market based on the fact that Virtual Unbundled Local Access (“VULA”)  on  cable  would  be  functionally  interchangeable  with   other   forms   of  active  local  wholesale  access.

(21)   Nevertheless, the Notifying  Parties  consider  that  the  exact  product  market  definition can be left open as the Transaction does not raise serious doubts, regardless of the envisaged   product  market definition.

4.1.1.3. The  Commission’s  assessment

(22)   The results of the market investigation  are  inconclusive regarding  whether  there  is  a single  overall   wholesale   broadband   access   market   in   Belgium.28   Similarly,   the results of the  market  investigation  are  also inconclusive regarding  a  possible segmentation (i) according to the level  where  the  point  of interconnection  is  situated,  that  connects  the  infrastructure  of  the  wholesale  provider  and  that  of  the  customer (i.e. local broadband access / central broadband access), (ii) according to the type of access to fixed connections, or (iii) according  to  the  type  of  technology  (cable  or copper / DSL pair  / fiber).29

(23)   Some  respondents  referred  to  the  BIPT’s  2018  decision30 where  the  BIPT  identified a wholesale  local  broadband  access market,  which  includes  the  passive physical access and the virtual access to copper and fiber networks at a local level, excluding possible forms of local access on the cable  networks  and  access  to  Fiber-to-the-  Office (“FTTO”), and which is separate from the wholesale central broadband access market.31 Another respondent criticized the BIPT’s decision, noting that the Belgian wholesale broadband access markets should be  technologically  neutral  (i.e.  including  both copper and cable).32

(24)   In light of the above, the  Commission  considers  that,  for  the  purpose  of this  decision, the question of the exact  scope  of  the  wholesale  broadband  access  market  with respect  to  its  possible  segmentations  ((i)  the  level  where  the  point  of interconnection  is situated (i.e.,  wholesale  local  or  central  broadband  access),  (ii)  the  type  of access to  fixed   connections  (i.e.,  wholesale  LLU,  bitstream  or  resale  broadband  access), or (iii) the type of technology  (i.e.,  cable  or copper, DSL pair  or fiber))  can be left  open  as the Transaction does not  raise serious  doubts  as  to  its  compatibility  with  the internal market or the functioning of the EEA Agreement under any of  the  plausible  product  market  definitions considered.

4.1.2. Relevant geographic market

4.1.2.1. The  Commission’s   previous  practice

(25)   In its decisional practice,  the  Commission  considered  whether  the  geographic  market  for wholesale broadband  access  was  national  (i.e.  Belgian)  or  limited  to  the  footprint of the operators’ cable network, but ultimately left the definition open.33 In a  recent decision concerning the  Belgian  market,  the  Commission  concluded,  for  the  purpose  of that decision that the geographical scope  corresponded  to  the  coverage  area  of  each cable  operator (i.e.  Telenet,  Brutélé  and VOO/Nethys).34

4.1.2.2.   The  Notifying  Parties’  views

(26)   The Notifying Parties consider that the markets could  be  national,  but  they  may  also need to be defined along more limited borders than national, such as  for  instance  at regional or cable zone level or on the basis of the catchment area of the network concerned.35

(27) In any event, the Notifying Parties consider that, when looking at those narrower  geographic  dimensions  of  the  market,  the  respective wholesale  broadband  access offers of Proximus and the  JV  will  not  be  in  direct  competition  with  each other  but will  in  fact  be  complementary  from  a  geographic  perspective.  Indeed,  the  JV  will only deploy its own FTTH-infrastructure in areas in which there is no standalone deployment by Proximus of such infrastructure. Therefore, from a  geographic  perspective, the respective FTTH-network  deployments  by  Proximus  and  the  JV  will be distinct.

(28)   Consequently, the Notifying Parties consider  that  the  exact  geographic  market  can  be left  open as the Transaction  does not  raise  concerns  under  any possible  delimitation.

4.1.2.3. The  Commission’s  assessment

(29)   A  large  majority  of  respondents  in  the  market  investigation  consider  that   the wholesale broadband  access  market  should  be  defined  as  national.36  A  small  number of respondents to the market investigation  however consider  that  the  geographical market  should  be defined  according  to the coverage  area of each cable   operator.37

(30)  In this respect, in its decision of 29  June  2018,  the  BIPT  defined  a  separate  (i)  national wholesale local access market; (ii) national wholesale central access market  (limited to copper and fibre networks); and  a  (iii)  wholesale  central  access  market (limited to cable  networks)  with  a  geographic  dimension  matching  the  coverage  area of each cable operator.38

(31) In light of the above  and  for  the  purpose  of this  decision,  the  Commission  considers that it is appropriate to consider the effects of this Transaction on both a  national  wholesale  broadband  access market  and  a  wholesale  broadband  access   market limited   to the level  of the cable  operator’s  coverage  area.

(32) In any event, the exact delineation of the relevant geographic  market  can be left  open given that the Transaction would  not  raise  serious  doubts  as  to  its  compatibility  with  the internal market  or  the  functioning  of  the  EEA  Agreement  under any  of  the plausible   geographic   market  definitions considered.

4.2. Wholesale supply  of leased lines

(33) Wholesale leased lines are part-circuits  that allow  telecommunications  providers  to connect their own networks to end user sites for the supply of business connectivity services. In  addition,  wholesale  leased  lines  are  an  input  for  the  provision  of  fixed  and mobile   telecommunications   services.39

4.2.1. Relevant product market

4.2.1.1. The  Commission’s   previous  practice

(34) In previous decisions, the Commission has considered a general product market for wholesale  supply  of  leased  lines  and  potential  further  segmentations  between  trunk and terminating segments, passive and  activated lines,  as  well  as  according  to bandwidth (below/above 2Mbits/s).40 The Commission has also considered a further segmentation  of  the  wholesale  leased  lines  market  into passive (dark  fiber)   and  active  infrastructure  (traditional  managed  leased  lines,  Ethernet   services   with guaranteed bandwidth).41   Ultimately,   the   Commission   left   the   market   definition  open.

4.2.1.2. The  Notifying  Parties’  views

(35)   The  Notifying  Parties  submit  that the  relevant  market  is  the   broader   wholesale market for high-quality access provided at a fixed location,  including  the  wholesale  supply of leased lines.42 This is  based  on the  evolving  demand  of business  customers  for high-quality access as  a  consequence  of  which,  operators  use a  number  of different wholesale inputs, ranging from leased lines using traditional  or  alternative interfaces to other wholesale  access products.  These products  fulfil certain  high- quality characteristics such as: (i)  connectivity  providing  a  dedicated  connection  per  user  point  to  point  very  high  (symmetrical)  bandwidth lines;  (ii)  extremely   low  packet drop ratio (IP packet loss); (iii) service level agreement up to 7 days/7,  24 hours/24;  (iv)  symmetrical  or  near-symmetrical  line  profiles;  (v)  very  high   bit  rates  up   to  10   Gbps,   including   often   also   a   guaranteed   bandwidth;   (vi)   possibility  of security thanks to the redundancy of the equipment  and  of  the  physical  line  (double  path, double connection to  the  network,  double CPE,  etc.);  and  (vii)  jitter  and wander guarantees.

(36)   Similarly, the  2014  and  2020  Recommendation  identifies such  a  wholesale  high- quality access provided at a  fixed  location (market  2 of the  2020 Recommendation or the “wholesale dedicated access” market).43 In  its  most  recent decision,  the  BIPT has also identified a  wholesale  market  for  high-quality  access,  without  distinction  as  to  the  technology  or speed and  use of these  services,  but excluding  dark fiber.44

4.2.1.3. The  Commission’s  assessment

(37)   A large majority of respondents consider that there is a single  overall  market  for wholesale  supply of  leased  lines  in  Belgium,   without   further   segmenting   the  market.45

(38)   In line with the BIPT’s decision of 13 December 201946, a majority of respondents consider that the wholesale supply of leased lines market  includes  various  wholesale  inputs,  ranging from leased  lines  using traditional  or   alternative   interfaces independently of the underlying infrastructure,  to  other  wholesale  access  products, which fulfil certain high-quality access requirements.47 This  would  include (i)  all high-quality access services (whether or not  they  include a  trunk  segment);  (ii)  all Ethernet services, WDM leased lines and SDH leased lines, (iii) all point-to-point, point-to-multipoint   and   multipoint-to-multipoint    Ethernet    services;   (iv)    both “access” and “backhaul”  type  services; and  (v)  all  of  these  high-quality  access  services  independently  of their  speed.

(39)   In its decision of 13 December 2019, the BIPT considers that dark fiber does not constitute a substitute for active leased lines (or any other substitutable  wholesale high-quality  access  services). The  BIPT  has  determined  that the   wholesale   leased lines services, and more generally  all  substitutable  wholesale  high-quality  access  services, encompass only active services since they require  precisely the  active intervention of the services provider in terms of “control of the connectivity and proactive management of defects and incidents that may occur”.48

(40)   However, contrary to that decision,  a  number  of  respondents  to  the  market investigation consider that the  wholesale  supply of  leased  lines  market  in  Belgium should  include dark  fiber  given its  substitutability  with  a  number   of  the   services  listed in paragraph (38) above.49 However, other respondents nuance  that, while  dark fiber (passive) can be substitutable to active products, this may not be the case for all customers on the leased lines market given that not all customers have the ability to self-supply  and operate active   equipment.

(41)   In light of the above, the  Commission  considers  that,  for  the  purpose  of this  decision, the relevant product market  is  the  overall  wholesale  supply  of  leased  lines  market (which  includes  various  wholesale  inputs,  ranging from   leased   lines   to  other wholesale  access products,  which  fulfil   certain   high-quality   access   requirements). The question whether this  product  market  includes  dark  fiber  or not,  can be left  open as the Transaction would not raise serious  doubts  as  to  its  compatibility  with  the  internal market or the functioning of the EEA Agreement under any of  the  plausible  product  market  definitions considered.

4.2.2. Relevant geographic market

4.2.2.1. The  Commission’s   previous  practice

(42) In previous  decisional practice,  the  Commission  considered  that the  geographic market for wholesale   supply  of leased  lines   is  national  in  scope.50

4.2.2.2.   The  Notifying  Parties’  views

(43)   The Notifying Parties submit that the relevant geographic market to be considered is  national  in  scope.51

4.2.2.3. The  Commission’s  assessment

(44)  A large majority of respondents  to  the  market  investigation  consider  that the  geographic market for wholesale supply of leased lines  is  national  in  scope.52  These results are also consistent with the BIPT’s market analysis decision  of 13  December  2019, which  defined  the  geographical  market  as national  in  scope.53

(45) In light of the  above,  and  for the  purposes  of  this decision,  the  Commission  considers  that the  relevant  geographic  market  for   the   wholesale   supply  of  leased lines   (irrespective  of  whether  such  market  includes  dark  fiber  or  not,  see  paragraph (41) above) is  national  in  scope and corresponds  to the  territory  of Belgium.

4.3. Retail mobile  telecommunications  services

(46)   Mobile telecommunications services to end  customers consist of  the  sale of subscriptions enabling access to  public  mobile  telecommunications  networks.  Such access allows end users  to  make  voice  national  and  international  calls,  send  and receive  messages  and use mobile    data.54

4.3.1. Relevant product markets

4.3.1.1. The  Commission’s   previous  practice

(47) In previous decisions, the Commission found that there is an overall  retail  market  for mobile telecommunications services, constituting a separate market from retail fixed telecommunications  services. The   Commission   did   not   divide   that   market   further into possible sub-segments  based  on  the  type  of customer  (business  or  private),  type of tariff (pre-paid  or  post-paid),  network  technology  (2G/3G,  3G/UMTS  and 4G/LTE), or type  of  service  (national  or  international  calls,  internet  data  services,  voice  and text  services).55

(48)   The Commission has  considered  possible  distinctions  within  the  overall  retail  market  for mobile telecommunication services between pre-paid or  post-paid  services  and  private customers or business customers, concluding  that  these  did  not  constitute  separate product  markets  but  represent  rather  market  segments  within  an  overall  retail  market  and leaving  the question  of these  possible  further   segmentations  open.56

4.3.1.2. The  Notifying  Parties’  views

(49) The Notifying Parties submit  that, in  line  with  the  Commission's  previous  decisions,  there is an overall market  for retail  mobile  telecommunications  services,  including business  and private  customers,  and pre-paid and post-paid   services.57

4.3.1.3. The  Commission’s  assessment

(50)   A large majority  of  respondents  to  the  market  investigation  stated  that  there is  a single   overall  retail  market  for  retail  mobile   telecommunications services.58

(51)   In light of the above, for the purpose of this  decision,  the  Commission  considers  that there  is  an overall  retail  market  for mobile   telecommunications services.

4.3.2.  Relevant geographic market

4.3.2.1. The  Commission’s   previous  practice

(52) In its decisional practice, the  Commission  has  consistently  concluded  that  the  market  for  the provision  of retail  mobile  telecommunication  services  is national  in   scope.59

4.3.2.2. The  Notifying  Parties’  views

(53) The Notifying Parties consider  that the  relevant  market  should  be  considered  as national  in  scope.60

4.3.2.3. The  Commission’s  assessment

(54) First, a large majority of respondents consider that the  geographic  market  for  retail  mobile   telecommunication  services  is  national  in scope.61

(55)  In light of the above, and for the purposes of  this decision,  the  relevant  geographic market for retail mobile telecommunication  services is  national  in  scope,  and corresponds  to the territory  of Belgium.

4.4. Retail fixed voice services

(56)   Fixed telephony services to end customers comprise the provision  of  subscriptions enabling access to public telephone networks at a fixed location for the  purpose  of  making   and/or  receiving  calls  and related  services.62

4.4.1. Relevant product markets

4.4.1.1. The  Commission’s   previous  practice

(57)  In previous decisions, the  European  Commission  considered  an  overall  market  for  retail fixed voice services (“retail fixed voice  market”) without  further  subdivisions between local/national  and  international  calls,  residential  and  non-residential customers,63    and including  Voice  over Internet  Protocol (“VoIP”)   services.64

4.4.1.2. The  Notifying  Parties’  views

(58) The Notifying Parties  agree  with  the  Commission’s  decisional  practice  and  consider  that there is an overall retail fixed voice market, including all subdivisions between local/national and international calls, residential and non-residential customers,  and including  Voice  over Internet  Protocol (“VoIP”)  services.65

4.4.1.3. The  Commission’s  assessment

(59)   A  large  majority  of  respondents  confirm  that  there is  a  single  overall  retail  market for  retail  fixed  voice  services.66

(60)  In light of the above, for the purpose  of this  decision,  there  is  an  overall  retail  fixed voice  market  without  further  subdivisions  between  local/national  and  international  calls, residential and non-residential customers,67 and including Voice over Internet Protocol (“VoIP”)  services.

4.4.2. Relevant geographic market

4.4.2.1. The  Commission’s   previous  practice

(61)   In its decisional practice,  the  Commission  has  left  the  geographic  definition of  the market open, considering the possibility that the market may be  national,  regional  or limited to the coverage  area  of  each  operator.68  In  some  decisions,  the  Commission has considered this market as national due to the continued importance of national  regulation of the telecommunications sector,  the  provision  of  wholesale upstream  services at  national  level  and  the  fact  that the  tariff  plan   of  telecommunications service  providers  is  predominantly  national.69

4.4.2.2. The  Notifying  Parties’  views

(62)   The Notifying Parties consider  that  the  relevant  geographic  market  should  be  defined  as national  in scope.70

4.4.2.3. The  Commission’s  assessment

(63) The large majority of respondents to  the  market  investigation  confirm  that the geographic   market   for   retail   fixed   voice   services   is    national   in   scope.71    A   few respondents to the market investigation consider that the market should be defined according to the coverage area of each cable operator or at the level of the operator’s footprint.72

(64)   In  light  of  the  above,  while  there  are  indications  that  the  relevant  geographic  market is national  in  scope,  the  Commission  considers  that,  for  the  purposes  of this  decision, it is appropriate to assess the effects of  the  Transaction  at  the  national  level,  at  the  level of the coverage area of each cable operator, and at the level of the operator’s footprint.

(65)   In any event, the exact  delineation  of the  relevant  geographic  market  can be left  open for the purpose  of this  decision,  as  the  Transaction  would  not  raise  serious  doubts as to  its  compatibility  with  the  internal  market  or  the  functioning  of  the  EEA  Agreement   under  any of the  plausible   geographic   market  definitions considered.

4.5. Retail fixed internet services

(66)   Fixed internet access services at  the  retail level  consist of  the  provision  of subscriptions enabling customers to access the internet through  a  fixed  telecommunications  connection.73

4.5.1. Relevant product market

4.5.1.1. The  Commission’s   previous  practice

(67)   In recent cases, within  an  overall product  market  for the  supply  of  retail  fixed internet  access services (“retail  fixed internet  market”),  the   Commission  considered but ultimately left open possible segmentations according to (i)  product  type (distinguishing between narrowband, broadband, and dedicated access), and (ii)  distribution technology (distinguishing between xDSL,  fibre,  cable,  and  mobile broadband).

(68)   Furthermore, the Commission also considered, but ultimately left open, possible segmentations as to customer type,  distinguishing  between  residential  and  small business customers, on  the  one  hand,  and  larger  business  and  public  authorities,  on  the  other  hand.74  Conversely,  the   Commission  acknowledged   that  the   retail  market for fixed internet access services should  not  be  divided  according  to  download speed.75 In relation to the Belgian market  specifically,  the  Commission  recently  concluded  that  there  was  an  overall  single   retail  market  for  the  provision  of  internet access, without the need to segment it according to the technology used or download speed.76

(69)   Finally, the Commission previously considered  that fixed internet  access services provided through mobile network infrastructure (so-called “fixed  wireless  access”  or FWA services) do  not  form part  of  the  retail fixed internet  access market.77 Similarly,  the  Commission  acknowledged   that   fixed   internet   services   to  large business and government customers form part  of  a  separate  market  for  the  retail  supply  of business  connectivity.78

4.5.1.2. The  Notifying  Parties’  views

(70)   The  Notifying  Parties  submit  that  there  is  an  overall  retail  fixed internet  market  in   line   with  the  Commission's  decisional practice.79

4.5.1.3. The  Commission’s  assessment

(71)   A large majority of  the  respondents  to  the  market  investigation  confirm  that  there  is  an overall retail fixed internet market, excluding FWA services and retail business connectivity services without the need to distinguish different  customer  and  product types.80

(72)   As regards a potential distinction according to  the  type  of  distribution  technology (xDSL, fibre,  cable,  and  mobile  broadband),  the  majority  of  respondents  disagrees with the need for such a segmentation. For instance, one respondent notes “[r]etail customers switch relatively easily between technologies in case the coverage of the networks allows it”.81

(73)   As regards a potential distinction according to the  download  speed  (e.g.  above  or  below 30 Mbps), the large majority of respondents disagrees with the need for such a segmentation.82

(74)   In light of the above,  for  the  purpose  of this  decision,  the  Commission  concludes  that an overall market for the  retail supply of  fixed internet  access services exists,  excluding  FWA  services and  retail  business  connectivity  services, and  without  the need to further  segment   the  market.

4.5.2. Relevant geographic market

4.5.2.1. The  Commission’s   previous  practice

(75)  In its previous decisions, the Commission concluded that the retail  market  for  the provision   of  fixed   internet   services  was  national  in  scope,  and  in  some   cases,   the Commission left open whether  markets  should  potentially  be  defined  on  a  regional basis  or by reference  to the  footprint  of the  operators’ networks.83

(76)   In  a  recent  decision,  concerning  the  Belgian  market,   the   market  investigation revealed elements tending towards a delineation corresponding  to  the  operators' coverage  area. Ultimately,   the exact  geographic   market  definition  was left open.84

4.5.2.2. The  Notifying  Parties’  views

(77) The Notifying Parties submit that the market structure in Belgium shows different competitive  dynamics  between  the  different  regions   and,  more  specifically,   between the different cable zones, and that therefore the market  is  subnational  in  scope  (i.e.  region,  cable  zone  or catchment  area of the  operators’ concerned).85

4.5.2.3. The  Commission’s  assessment

(78) A majority of respondents  in  the  market  investigation  consider  that  the  geographic  retail  fixed  internet   market should  be defined  as  national.86

(79)   However, a number of respondents to the market investigation consider that the geographical  retail  fixed internet  market  should  be  defined  at  the   regional  level,   at the level of the cable operator’s coverage area or at the level of  the  operator’s  footprint.87 For instance, one respondent noted: “there is a clear regional split as the fixed internet market is dominated by 3 main provider: Proximus, Voo & Telenet where Voo & Telenet are regionally bound because of their network. This makes competition very different in the 2 areas”.88

(80) In light  of the  above,  the  Commission  considers  that,  for  the  purpose  of this  decision, it is appropriate to assess the effects of  the  Transaction  on  the  retail  fixed internet market  on  a(i)  national  level,  (ii)  regional  level,  (iii)  the  cable  operator’s  coverage area, and (iv)  the operator’s  footprint.

(81) In any event, the exact  delineation  of the  relevant  geographic  market  can be left  open for the purpose  of this  decision,  as  the  Transaction  would  not  raise  serious  doubts as to  its  compatibility  with  the  internal  market  or  the  functioning  of  the  EEA   Agreement   under  any of the  plausible   geographic   market  definitions considered.

4.6. Retail business connectivity  services

(82)  The  retail market   for   business   connectivity   includes   fixed   telecommunications services purchased by large  businesses,  enterprises  and  public  sector  customers  in  order to provide  data connectivity  between multiple   sites.89

4.6.1. Relevant product market

4.6.1.1. The  Commission’s   previous  practice

(83)  In previous decisions, the Commission has considered a product  market  for  retail  business connectivity services (“retail business connectivity market”), including (i) broadband access for large business customers; (ii) leased lines;  and  (iii)  VPN90 services,91 but excluding connectivity services offered to residential, SMEs and small-office-home-offices  customers, which  are  part  of  the   retail   fixed   internet market. This is because  of  the  particular  requirements  and  purchase  processes  of larger business customers. The precise product market  definition was  ultimately  left open.92

4.6.1.2. The  Notifying  Parties’  views

(84) The  Notifying  Parties  submit  that there is  an  overall retail business   connectivity market  in  line   with  the  Commission's  decisional practice.93

4.6.1.3. The  Commission’s  assessment

(85) A large majority of respondents confirm that there is  an  overall retail business connectivity market, including (i) broadband access for large business customers;  (ii)  leased lines; and  (iii)  VPN  services, excluding  connectivity  services offered  to residential, SMEs  and  small-office-home-offices  customers, which  are  part  of  the  retail fixed internet  market.94  A  majority  of  respondents  also  confirmed  that  there  is  no need to distinguish the retail business connectivity services market according to technology or download speed and this market also excludes fixed wireless access (“FWA”)  and  fixed  internet   services  to large  business   and government  customers.95

(86) In light of the above, the  Commission  considers  that,  for  the  purpose  of the  decision, the relevant product market is the overall  retail  business  connectivity  market.  The question whether this product market can be further segmented according to (i)  technology or (ii) download speed can be left open as the Transaction does not raise serious  doubts  as  to  its  compatibility  with  the  internal  market  or  the  functioning  of the  EEA  Agreement  under any  of  the  plausible  product market   definitions  considered.

4.6.2. Relevant geographic market

4.6.2.1. The  Commission’s   previous  practice

(87)  In previous decisions, the Commission has found that the retail market for business connectivity  was national  in  scope.96

4.6.2.2. The  Notifying  Parties’  views

(88) According to the  Notifying  Parties,   the   geographic   retail   business   connectivity market  can be considered  as national  in  scope. 97

4.6.2.3. The  Commission’s  assessment

(89)  A majority of respondents confirm that the geographic market for retail business connectivity  services  is  national  in  scope.98

(90)  In light of the above, while there are  indications  that a  national  retail  business connectivity  market  exists,  for the  purpose  of  this decision,   the   Commission considers that it is appropriate to consider a (i) national geographic  scope,  and  a  narrower scope ((ii) regional, (iii) the cable operator’s coverage area, and (iv)  the  operator’s footprint) for any of the plausible product market definitions considered in paragraph  (86) above.

(91) In any event, the exact  delineation  of the  relevant  geographic  market  can be left  open for the purpose  of this  decision,  as  the  Transaction  would  not  raise  serious  doubts  as to  its  compatibility  with  the  internal  market  or  the  functioning  of  the  EEA  Agreement   under  any of the  plausible   geographic   market  definitions considered.

4.7. Potential  market  for the retail supply  of multi-play  services

(92)   Multi-play   services   include   several   telecommunications   products  (mobile   services and  one  or  more of  the  fixed services  such  as  fixed internet,  fixed telephony  and TV),  which  are provided  to consumers  through  a common   offer.99

4.7.1. Relevant product market

4.7.1.1. The  Commission’s   previous  practice

(93) In its decisional  practice,  the  Commission  has  left  the  question  open  as  to  whether this market was separate from the retail markets for television, voice  and  Internet access.100 In Liberty Global/BASE Belgium and Providence/VOO/Brutélé, the Commission has noted an upward trend in sales of bundled offers in Belgium, but  concluded  that  it  was not necessary  to define  a separate retail  multi-play  market.101

4.7.1.2. The  Notifying  Parties’  views

(94) The Notifying Parties submit  that,  in  line  with  the  position  of  the  BIPT102,  a  multi- play  market  does not exist.103

(95)   First, customers can easily switch between  the  purchase  of  bundled  services and separate  services, and  the  same applies from  the  supply-side.  Second,  the  BIPT noted that the asymmetry  observed  in  the  development  of  individual  retail  mobile  shares in the Belgian market, appears to contradict the existence, at this stage, of a  separate multi-play market. If a separate multi-play market  in  Belgium  existed,  in response to a price increase of a bundle, consumers would switch to  a  bundle  with  another operator and not  unpick  the  bundle  and  revert  to  purchasing  mobile  services on a standalone basis, implying a symmetrical development at the  level  of the  market shares  of the  different   products  among  the different operators.104

4.7.1.3. The  Commission’s  assessment

(96) A large majority of respondents to the market investigation consider that  no  separate market  for  multi-play  services  exists  in Belgium.105

(97)   As noted above (paragraph (95)), from  the  demand  side,  customers  can  and  do  switch easily between purchasing their services as part of a multi-play offering or  separately  (e.g.  “unpicking” the  bundle),  subject  to  their  needs.  From  the  supply  side, operators  who  already  offer  separate  services  can  easily  offer  these  services  as a  bundle,  and  vice  versa.  Finally,  while  the  popularity  of  multi-play  offers  in  Belgium  is  certainly  growing,   its  commercial   development  is  still evolving.106

(98)   Similarly, the  BIPT  confirmed  that  the  sale  of  bundles  is  growing,  however  it  left  open the question of whether a separate market for multi-play services exists  in  Belgium.107 Furthermore, in  its  2014  Recommendation,108  the  Commission  acknowledges the increased demand for packages of services offered by  the  same operator  at  a  flat  rate  (also  known as  “bundles”).  However,  the  Recommendation has not proposed to define a separate retail market  for bundles  because  individual wholesale markets will, in all  likelihood,  constitute  (previously  regulated)  inputs  to replicate the retail market for  bundles.  Therefore,  in  case  of competition  concerns  at  the retail level, such  concerns  would  be  addressed  at  the  level  of  the  relevant wholesale  market.109

(99)   In light of the above, and for the purpose  of this  decision,  the  question as to  whether there exist one or more multi-play markets  which  are  distinct  from  each  of  the underlying individual telecommunications services can be left open given that the Transaction would not raise serious doubts  as  to  its  compatibility  with  the  internal market or the functioning of the EEA Agreement, independently of the existence of a separate market,  or a lack thereof.

4.7.2. Relevant geographic market

4.7.2.1. The  Commission’s   previous  practice

(100)   In previous decisions, the Commission considered that the geographic scope of  any possible retail market  for multi-play  services   would   be   national   since   the components of  the  multi-play  offers  are  offered  individually   at  a  national  level,  and the bundling of the services would not change  the  geographic  scope  of  the components.110 In the recent Providence/VOO/Brutélé decision,  the  Commission however  left  the  question  of the geographic   market  definition  open.111

4.7.2.2.   The  Notifying  Parties’  views

(101) The Notifying Parties  submit  that a  multi-play  market  does  not  exist,  and  have therefore not commented on its  potential geographic  scope  (see  paragraph  (95) above).

4.7.2.3.  The  Commission’s  assessment

(102)   A majority  of the  respondents  to  the  market  investigation  of this  case  considered  that a possible market for multi-play offers  (irrespective  of  what type  of  bundles  are included in  such  a  possible market)  would  be  national  in  scope.112  This  view, however, does not necessarily align with the  results  from  the  market  investigation obtained in relation to retail fixed internet access services, which would be one of the components  of such a hypothetical  market.

(103)   On this basis, the Commission considers that, for the purpose of this decision, it is appropriate to consider a (i) national geographic scope, and a narrower scope  ((ii) regional,  (iii)   the  cable  operator’s  coverage  area,  and  (iv)  the  operator’s  footprint)  to the extent one or more separate retail multi-play  markets  exist  as  considered  in paragraph  (99) above.

(104)   In any event, the exact  delineation  of the  relevant  geographic  market can be left open  for the purpose  of this  decision,  as  the  Transaction  would  not  raise  serious  doubts  as to  its  compatibility  with  the  internal  market  or  the  functioning  of  the  EEA  Agreement   under  any of the  plausible   geographic   market  definitions considered.

5.  COMPETITIVE  ASSESSMENT

5.1. Analytical framework

(105)   Article 2 of the  Merger  Regulation  requires the  Commission  to  examine whether notified concentrations are compatible with the  internal  market,  by  assessing  whether they would significantly impede effective competition in the internal market or in  a substantial  part  of  it,  in  particular  through  the  creation  or  strengthening  of   a dominant   position.113

(106)   In this respect, a merger may entail horizontal and/or non-horizontal (i.e. vertical or conglomerate)  effects.  Horizontal  effects are  those  deriving  from a   concentration where the undertakings concerned are actual or  potential  competitors  of each other in  one or more of the relevant  markets  concerned.  Non-horizontal  effects  are  those deriving  from a  concentration where the  undertakings  concerned  are  active  in  different relevant markets. In a case where a merger entails both horizontal and non- horizontal effects, the Commission will appraise these effects in accordance with the guidance   set out in  the  relevant  notices.114

(107)   Horizontal mergers involve companies  which  are  actual  or  potential  competitors of each other in one or more of the relevant markets concerned. The Horizontal Merger Guidelines list a number of factors which may influence whether  or  not  significant  horizontal  non-coordinated  effects  are  likely to  result  from  a  merger,   such  as  the large market shares of the merging firms, the fact that the merging firms are close competitors,  the  limited  possibilities  for customers   to  switch   suppliers,   or  the  fact that  the  merger  would  eliminate   an important   competitive force.115

(108)   Vertical mergers involve companies operating at different  levels  of  the  supply  chain. There  are  two  main ways in  which  vertical  mergers  may   significantly   impede effective   competition:  input  foreclosure   and customer   foreclosure.

(109)   Input  foreclosure  may  raise competition  problems only  if  it  concerns  an  important input for the downstream  market,  and  if  the  combined  entity  has  a  significant  degree of  market  power  upstream.116    In  assessing  the  likelihood   of  an  anticompetitive input foreclosure  strategy, the  Commission  examines:  (i)  whether  the  combined   entity   would  have  the  ability  to  substantially  foreclose access to  inputs;  (ii)  whether   it would have  the  incentive to  do  so;  and  (iii)  whether  a  foreclosure  strategy  would  have  a significant   detrimental   effect  on competition downstream.117

(110)   For a transaction to raise customer foreclosure  competition  concerns,  the  combined  entity must be  an  important  customer  with  a  significant  degree  of  market  power  in  the downstream market.118 In assessing the likelihood of an anticompetitive customer foreclosure  strategy, the  Commission  examines:  (i)  whether  the  combined   entity   would have the ability to foreclose access to downstream markets by reducing  its  purchases  from  upstream  rivals;  (ii)  whether  it  would  have  the   incentive   to  do  so; and  (iii)  whether  a  foreclosure   strategy  would   have   a  significant   detrimental  effect  on consumers  in  the downstream  market.119

5.2. Identification  of affected markets

(111)   Following the start-up of the JV’s activities in 2022, the Transaction gives rise to the following  horizontally  and vertically  affected   markets.

(112)   First, on the wholesale broadband access market, Proximus and the JV’s  combined  market share exceeds 20% (based on expected 2022 figures)120 in Telenet’s coverage area. In the wholesale local broadband access market, including a potential narrower segment of the wholesale local broadband access market which is limited to DSL technology (fiber and copper), this is also the  case  on  a  potential  national  Belgian market and in Telenet’s coverage area. Therefore, the  wholesale  (local)  broadband  access market  is  horizontally  affected  (see paragraphs  (115)-(116) below).

(113)   Second, this wholesale  (local)  broadband  access  market,  where  both  Proximus  and the JV are active, is  upstream  from Proximus’  wholesale  and  retail activities downstream on  the  (i)  wholesale  resale  broadband  access121  and  supply  of  leased lines markets,  and  the  (ii)  retail telecommunications  markets  (retail mobile,  fixed  internet, fixed voice, business  connectivity  and  a  potential supply of  multi-play services).  These  markets  are vertically  affected  (see paragraph  (130) below).

(114)   The Transaction does  not  give rise  to  any  cooperative  effects  given that the  Notifying Parties will not  both  be  independently  active  on  any  of  the  same  markets  as the  JV,  or  in  a  market  which  is  upstream or downstream from that  of the  JV or in a neighbouring market closely related to this market.  As  set  out  above  in  paragraph (15), Nexus, and any other subsidiary of EQT,  is  not  active  in  Belgium, [details  regarding  EQT activities   in Belgium].122

5.3. Horizontal relationships

(115)   Following the start-up of the JV’s  activities,  in  2022,  the  Transaction  is  expected  to give rise  to  a  very  limited  horizontal  overlap between  the  JV’s  and  Proximus’ activities in (i) the overall wholesale broadband  access  market  in  Telenet’s  coverage  area, (ii) the wholesale local broadband access market in Belgium and in  Telenet’s coverage area and (iii) the wholesale local broadband access market limited to DSL distribution  technology  in  Belgium   and in  Telenet’s   coverage area.

(116)   In an overall wholesale broadband access  market,  Proximus’  market  share  is  [20-  30]% in Telenet’s coverage area (based on 2019  figures)  and  the  JV is  expected  to hold less than [0-5]% market share (based on expected 2022 figures).123 Proximus’ market shares in a wholesale local broadband access market124 would be close to  100%125 (based on 2019 figures) with the JV  expected  to  hold  less  than  [0-5]%  (based on expected 2022 figures)  in  Belgium  and  in  Telenet’s  coverage  area.  The same figures apply in a  segment  of  the  wholesale  local  broadband  access  market, which  is  limited  to  DSL  distribution  technology  (DSL,  i.e.  fiber  and   copper).126 There are no other horizontally affected markets under  any  other  possible product  market definition.

5.3.1. The Notifying Parties’ views

(117)   The Notifying Parties state that the Transaction is unlikely to raise any horizontal non-coordinated concerns on the wholesale broadband  access  market  (and  all  its possible  sub-segments)   for  the following  reasons.

(118)   First, the Transaction entails the entry of a new competitor on the overall wholesale broadband access market in Belgium by which it  creates  a  new  future-proof infrastructure   that  offers  higher  speeds to the benefit   of customers.127

(119)   Second,  the  Notifying  Parties  emphasize  that the  wholesale  broadband  access’ activities of Proximus have a modest scale  on  the  market  as  compared  with  the activities of the cable operators on the market.128 For instance, the largest wholesale customer for broadband access  services is  Orange  Belgium.  Orange  Belgium  has chosen to procure the wholesale broadband access services mainly  from Telenet  (and Voo), based on Telenet’s regulated offer instead of the copper-based wholesale  broadband access services provided by  Proximus.129 Concretely, at  the  level  of Telenet’s coverage area, Orange  Belgium  is  understood  to  purchase  [...]  wholesale  lines   with  the cable  operators,  while   Proximus   only  has [...] lines.130

(120)   When looking at the wholesale local broadband access market, as defined  by  the BIPT131, Proximus holds close to 100% market share  (see  paragraph  (116)  above)  given that the BIPT has excluded wholesale broadband access  offers  on  the  cable network from this market. However,  the  Notifying  Parties  recall  that  these  offers  on  the cable network are the most successful on the market, while the volumes of sales achieved by  Proximus  are  extremely  limited.  Concretely, the  total  volume  of unbundled  local  loop  services that are  currently  purchased  from  Proximus   covers  less than [...] access lines (end of  December  2020)  and  shows  even  a  downward  trend. Proximus’ VULA offers for virtual  local  unbundling  is  currently  not  being purchased  given  that  no market  player  has expressed  an interest.132

(121)   Third, Proximus’ wholesale broadband access services  (i.e.  LLU,  VULA  on  copper  and VULA on fiber) are subject to ex ante regulatory  obligations.  The  BIPT  has  imposed physical and virtual access obligations on Proximus. Additionally, the BIPT imposed non-discrimination, transparency  and  price  control  obligations.133 Such regulatory obligations will also apply to the  JV’s  activities.134 Similar  regulatory obligations apply  on  the  competing  wholesale  broadband  access  offers  provided  by the cable network operators in Belgium. Moreover, in line with the harmonised EU regulatory  framework  for electronic  communications,  the  sector   regulator   can intervene at all times to  conduct  a  market  analysis  and  to  impose  amended or  adapted ex ante regulatory obligations based on its findings regarding the market evolution.135

(122)   Finally, the JV will deploy its FTTH-infrastructure in areas  in  which  there is  no standalone deployment or plans to deploy by Proximus of such infrastructure. Consequently, from a geographic perspective,  the  respective FTTH  network  deployments   by Proximus   and the  JV will   be clearly  distinct   but complementary.136

5.3.2. Commission’s assessment

(123) The  Commission  considers  that the Transaction is  unlikely  to  raise horizontal  concerns in the market for wholesale broadband  access at  the  level  of  Telenet’s coverage area, in the national market for wholesale local broadband access or  any  possible  narrower  affected  markets,  for  the  following reasons.

(124)  First, as stated above in paragraph (116), the Transaction does not involve  an appreciable  market  share increment.(a) In the overall wholesale broadband access market at the level of  Telenet’s coverage  area,  the  JV’s  increment  is  extremely  low  (less than [0-5]% expected  in  2022).  This  figure  is  expected  to  increase  to  [5-10]% by 2024 in Telenet’s coverage area. The Parties’ combined market shares are modest ([20-30]%).137 (b) Similarly,  when  considering  the   wholesale   local  broadband  access  market  or a wholesale local broadband access market limited to DSL  distribution  technology, the JV’s increment is extremely low. In both of these local access markets, the JV is expected to hold [0-5]% by 2022 and [0-5]% by 2024 at national level, and [0-5]% by 2022  and  [5-10]%  by  2024  in  Telenet’s coverage  area.138

(125)   Second, the JV and the Notifying Parties are currently not competing on the  Belgian market. Therefore, this Transaction will  not  eliminate  any  important  competitive  constraint on market players. On  the  contrary, the  JV  is  a  new  entrant in  the wholesale broadband access market and  thus  a  new  additional  choice  on this  market for customers.

(126)   Third, as the Notifying Parties point out (see  paragraph  (122)  above),  from a geographic perspective, the respective FTTH  network  deployments  by  Proximus  and  the  JV will  be clearly  distinct.139

(127)   Fourth, a  large  majority  of  respondents   to  the   market  investigation  confirmed   that this new  entrant would  not  have  a  negative  impact  on  the  wholesale  broadband access market. A competitor of Proximus noted that “Today, the Belgian market for wholesale broadband access services is characterised by competition between the incumbent copper network and the cable HFC networks. We expect the JV to compete with them which may further drive competition and thus foster innovation and development of new  services  and  business  models”.140  Furthermore, an important customer on this market  specified  that they consider  an  “increased  provision of wholesale local broadband access services to the market as a welcome development with the potential for significant positive impact on both the business environment and on the diversity and quality of choices available to Belgian  retailers and end-consumers.”141

(128)   Finally, a majority of respondents to the market investigation also confirmed that the existence of sector-specific regulation makes  it  possible to  exclude  or  limit  any  potential anti-competitive effect resulting from the Transaction on  the  wholesale  broadband access market.142 In this respect, the Commission  notes  that  the  BIPT’s  2018 decision has imposed a regulatory obligation on  Proximus  to  grant  wholesale  access to third  parties  to  its  copper pair  network  as  well as  its  fiber network, insofar  as this fiber network is destined  to  eventually  replace  Proximus’  copper  network.143  The   Parties  and  the  BIPT  have   confirmed   that  the  same  regulatory  obligations    will apply to the JV’s wholesale  broadband  access  activities.  Namely,  the  JV  will  be obliged to provide a non-discriminatory  non-exclusive  open  access  for  all  interested third  parties  to its  passive  network  (see paragraph  (137) below).

(129)   Therefore, for the reasons set out above,  the  Commission  concludes that the  Transaction does not raise serious doubts  as  to  the  compatibility  with  the  internal market as  a  result  of  horizontal  effects  on  the  market  for wholesale  broadband access, or any possible narrower  affected  markets,  either  at  the  national  level,  or  at  the  level  of Telenet’s   coverage area.

5.4.Vertical relationships

(130)   The JV’s upstream activities in the wholesale broadband access market in Telenet’s coverage area ([0-5]%, expected 2022)144 and  in  the  wholesale  local  broadband  access market145 at national level  ([0-5]%,  expected  2022)146  and  in  Telenet’s coverage area  ([0-5]%,  expected  2022)147  are  vertically  linked  to  Proximus’  activities in the following downstream markets in  Belgium.  This  gives rise  to  the  following vertically  affected  markets: (a) Wholesale markets: broadband resale market ([90-100]%, 2019)148, supply of leased  lines   (approx.  [50-60]%, 2019)149; and (b) Retail markets: retail mobile  ([30-40]%,  2019),  fixed internet  ([40-50]%, 2019), fixed voice ([50-60]%, 2019), business connectivity  ([40-50]%, 2019)  and  a  potential market  for multiple-play  services (approx.  [40-50]%, 2019).150

(131)   The Commission notes that the Notifying Parties’ arguments  and  the  Commission’s analysis is the same in relation to all downstream markets  (including  all  possible segments). There are no  vertically  affected  markets  under any  possible market  definition  other  than  those listed  in  paragraph  (130) above.

5.4.1.  Input foreclosure

5.4.1.1.  The  Notifying  Parties’  views

(132) The  Notifying  Parties  argue  that there will  be  no  input  foreclosure   by  restricting access to the JV’s network for competing providers of wholesale and/or retail telecommunications   services  for  the  following reasons.

(133) First, through the Transaction  a  new  provider  of  passive  fiber-based  services  will  enter at  the  wholesale  level.  The  JV  will  offer  an  alternative  to  any  interested operator  for realising  high  bandwidth access   to  customers.   Therefore,   the Transaction does  not  involve  a  possible foreclosure  upstream  of  an  existing (important)   input  that  is  currently  used downstream.151

(134)   Second, for input foreclosure to  be  a  concern,  the  firm  resulting  from  the  merger  (in this case the JV) must have a significant  degree  of  market  power  in  the  upstream market. In the present case, the JV is a new entrant and it is unlikely to have  any  significant   degree of market  power in  the  near future.152

(135)   Third,  downstream  providers  of  fixed electronic   communications   services   are vertically integrated cable operators which benefit from access to their own cable infrastructure  network,   covering   the   entire   territory   of   Belgium.   Moreover, alternative operators are currently able to access the network infrastructure of both Proximus  and  the  cable  operators,  which  have  an  obligation  to  provide access  to their  networks  under   regulated   terms   throughout   Belgium.   Such   regulation   will apply to any wholesale  broadband  access  product  that  will  be  provided  in  the  future by Proximus and that will use  as  an input  the  passive  wholesale  fiber  access  services that  will   be provided  by the JV.153

5.4.1.2. Commission’s  assessment

(136)   For the reasons set out  below,  the  Commission  considers  that  the  Transaction  does  not lead to credible input foreclosure concerns in the downstream markets for  (i)  wholesale resale broadband access and leased lines services, and  (ii)  retail  mobile  services, fixed internet  services, fixed voice   services,  business  connectivity  services  and potential  multi-play  services  (see paragraph  (130) above).

(A)   Ability  to engage  in  input   foreclosure

(137) The  Commission  considers  that the  Parties  will  not  have   the   ability  to  engage  in  input foreclosure by restricting access to the JV’s wholesale offer to downstream  operators.

(138) First, the Commission recalls that  the  JV  will  have  a  very  limited  market  position  in  the wholesale (local) broadband access market. The JV will  have  less  than  [0-5]% market share both at national level and at  the  level  of  Telenet’s  coverage  area (expected  in  2022) (see  paragraphs  (124) and  (130) above).  The  JV can therefore not be considered to have significant market power in the upstream wholesale (local) broadband  access market.

(139)   Second, the Commission notes that the JV’s activities are subject to sector-specific regulation, which prevents the JV from refusing access to  their  network  and  from charging excessive fees.154 In its decision of 29 June 2018, the BIPT has designated Proximus as an SMP operator (i.e. operators with significant  market  power  in  the  relevant markets)  with  regard  to  its  wholesale  local  broadband  access  activities.155  The designation of Proximus as  an  SMP  operator  also includes  the  JV  (as  an  affiliated company,  which  is  jointly  controlled  by  the  Notifying  Parties).156  This  has also been  acknowledged  and  confirmed  by  the  Notifying  Parties.157  Under   the BIPT’s decision, the JV (and Proximus) (i) must meet all requests  for  physical  (and  virtual) access to their (copper and) fibre networks158, and (ii) are bound by non- discrimination obligations which state  that access  to  the  wholesale  inputs  must  be similar in terms of functionalities and  price.159  Other  key  obligations  include  transparency obligations by  which  SMP  operators  must  make  public  specific information  such  as  reference offer  specifying  the   technical  and   tariff  conditions   of the access to  their  networks  and  price  control  obligations  which  includes  an  obligation to apply  fair  tariffs  (as  defined  in  the  BIPT’s  decision).160  As  a  result  of  this sector-specific  regulation,  the  JV  would  not  have  the  ability  to  foreclose wholesale   network access.

(140)   Third, following the proposed Transaction, customers will have a new and additional supplier of wholesale  local  broadband  access  services, in  addition to  the  existing offers by market players  such as Proximus  and  the  cable  operators.161  Concretely,  the JV represents a new and additional wholesale input on the (local)  broadband  access market in Belgium (as opposed to a (particularly important) existing  input  access  to  which  is  being  limited   or prohibited).

(141)   Fourth, in terms  of  alternatives  to  the  JV’s  services, in  the  wholesale  broadband access market, the offers by Proximus and the cable operators are similarly subject to sector-specific  regulation.  For  instance,  the  BIPT’s  decision of  29  June   2018 regulates Proximus’ copper pair network (at national  level)  and  the  coaxial  cable network of Brutélé,  Nethys  and  Telenet  (including  SFR)  (respective coverage  areas).162 Therefore, customers will have the choice  with  Proximus  and  the  cable operators as alternatives to the JV’s offer. Any strategy by the JV  to  foreclose downstream  operators  would  therefore  not be successful.

(142)   Finally, a respondent to  the  market  investigation  appears  concerned  by  the  threat  of the  JV’s  network  triggering a  potential  de-regulation  of  the  zones covered  by  the JV’s  network.163  The  BIPT’s  market  regulation  provides  that,   in   the   geographic zones where at least 3 independent Next Generation Access  (“NGA”)-operators compete, in line with  the  definitions  of  the  BIPT  decision,  the  regulatory  obligations  that were imposed  would  no  longer  apply.164  However,  the  JV cannot  constitute  such an independent NGA-operator. First, the BIPT assesses the presence of an NGA- operator at the level of the retail  markets.  The  JV  is  not  present  on  these  retail markets, therefore, it  cannot  be  considered  as  an  independent  NGA-operator.  This has also been confirmed by the Notifying Parties.165  Second,  the  BIPT  has  also confirmed that it does not consider the JV to be independent  from  Proximus.166 Therefore,  the  Commission  considers  that  this  threat  is  not credible.

(143)   Therefore, for the  reasons  set  out  above,  the  Commission  concludes  that  the  JV would not have the ability to foreclose rival operators  by  engaging in  an  input  foreclosure  strategy.

(B) Incentive   to engage  in  input  foreclosure

(144) The Commission considers that  the  Parties  will  not  have  the  incentive to  engage  in  input foreclosure by restricting access to the JV’s wholesale offer to downstream  operators.

(145)   A majority of respondents does not believe it is credible that the JV would have  the incentive to restrict or limit access  to  its  network  in  view  of  the  presence  of alternative networks and the  existence  of sector-specific  regulation.167 In  this  respect,  one customer emphasizes that Nexus is “a pure infrastructure player with no retail activities in Belgium today”, and they would consider “it is unlikely to seek to corner the FTTH market in any way. The JV will deploy significant  capital expenditures and, in theory, should be open to allowing whole[sale] buyers unfettered access to  its passive network so as to expand its market opportunities as much as possible.”.

(146)  Further, the Commission recalls that  Nexus,  one  of  the  parents  of  the  JV  together with  Proximus,  is  not  active   on  any  of  the   downstream  telecommunication  markets in  Belgium  and  therefore, will  not  have  any  incentive to  limit  the   JV’s  wholesale offers   to  third   parties  (i.e.  limiting   the   JV’s  wholesale   revenues).  On  the   contrary, Nexus is  incentivized to  maximise  the  JV’s  wholesale  revenues  in  light  of  the significant investments that the  JV  is  expected  to  make,  including on  the  basis  of equity  investments   from  the Notifying  Parties.168

(147)   For the reasons set out  above,  the  Commission concludes that the  JV would  not have  the incentive to  foreclosure  rival  operators  by  engaging in  an  input  foreclosure strategy.

(C)  Impact  on effective  competition

(148) The Commission considers that due  to  the  lack  of  ability  and  incentive,  it  is  not needed to conclude on the question whether any foreclosure strategy would have a  negative   impact  on effective  competition.

(149) Most respondents to the  market  investigation  consider  that  the  Transaction  will  not  have a negative impact on their business or on the  relevant  markets  (as  set  out  in  Section 4 above).169 A majority of respondents agree  that  a  potential positive  impact from the JV’s  entry  on the  market  would  depend  on (i)  the  conditions  that  will apply to gain wholesale access to  the  JV’s  infrastructure,  and  (ii)  whether  or  not  there  is  a risk that the deployment of the JV’s network would lead  to  a  de-regulation  in  the market. As set out above in paragraphs (137) and (144), it is clear that the JV will be subject to sector-specific regulation,  and  that  the  JV’s  entry  on  the  market  will  not  lead  to de-regulation.

(D)  Conclusion

(150) In light of the above, the Commission concludes that the Transaction  does  not  raise serious doubts as  to  the  compatibility  with  the  internal  market  with  respect  to possible input foreclosure practices  under  any  of  the  alternative  product  markets  for  the  (i)  wholesale  resale  broadband  access  and  supply  of leased  lines  markets,  and the (ii)  retail telecommunications  markets  (retail mobile,  fixed   internet,   fixed   voice, business  connectivity  and  a  potential  supply  of  multi-play  services),  irrespective  of  the  geographic  scope.

5.4.2.  Customer foreclosure

5.4.2.1. The  Notifying  Parties’  views

(151)   The Notifying Parties submit  that  there  will  be  no  customer  foreclosure  by  restricting  or limiting competing wholesale broadband access providers from  their  access  to Proximus as a customer.  The  Notifying  Parties  confirm  that  Proximus  currently  does  not purchase any wholesale broadband access services from other  operators,  and therefore  a risk  of customer  foreclosure   does not exist.170

5.4.2.2. Commission’s  assessment

(152)   For the reasons set out  below,  the  Commission  considers  that  the  Transaction  does  not  lead  to  credible  customer  foreclosure  concerns  in  the  upstream  wholesale   (local) broadband access market. The Parties will not have the ability or  the  incentive  to  foreclose rival  wholesale  broadband  access suppliers  by  restricting  access to  Proximus   or the JV as a (potential)   customer.

(A)  Ability  to engage  in  customer  foreclosure

(153) The JV and Proximus currently do not purchase any  wholesale  broadband  access  services from other operators in Belgium. As set out above (see paragraph (140)), post-Transaction, the JV will constitute a  new  operator  on  the  market,  offering wholesale local broadband access services. The JV is currently not yet active  on the market,  as it  will   be created as a greenfield  operation.171

(154) At the same time, Proximus does  not  purchase  any  wholesale  broadband  access services  in  Belgium.   [details  regarding  wholesale   broadband access services].172

(155)   For the reasons set out  above,  the  Commission concludes that the  JV would  not have  the ability to foreclose downstream operators by engaging in a customer foreclosure strategy.

(B)  Incentive   to engage  in  customer foreclosure

(156)   A majority of respondents to the market  investigation  confirmed  that there is  no  scenario in which Proximus  would  have  started  purchasing  access  from  them,  but would  no longer  have  an incentive   to do so post-Transaction.173

(157) Therefore, the Commission concludes that the JV would not have  the  incentive to foreclose  downstream  operators by engaging  in  a customer  foreclosure   strategy.

(C)  Impact  on effective  competition

(158) The Commission considers that due  to  the  lack  of  ability  and  incentive,  it  is  not needed to assess whether any foreclosure strategy would have a negative impact on effective  competition.

(159)   In any event, as indicated in paragraph (149), most respondents to the  market  investigation consider that this Transaction will not have a negative  impact  on  their  business  or on the relevant   markets.

(D)  Conclusion

(160)   In light of the above, the Commission concludes that the Transaction  does  not  raise serious doubts as to the compatibility with the internal market under any  of  the considered alternative product markets for wholesale broadband access, whether  at national  level  or at the level  of Telenet’s  coverage   area.

6. CONCLUSION

(161)   For the above reasons, the European Commission has decided  not  to  oppose  the  notified operation and to declare it  compatible  with  the  internal  market  and  with  the EEA Agreement. This decision is adopted in  application  of  Article  6(1)(b)  of  the Merger  Regulation  and Article   57 of the  EEA Agreement.

1        OJ L 24, 29.1.2004, p. 1 (the “Merger Regulation”). With effect from 1 December 2009, the Treaty on the Functioning of the European Union (“TFEU”) has introduced certain changes, such as the replacement of “Community” by “Union” and “common market” by “internal market”. The terminology of the TFEU will be used throughout this decision.

2        OJ L 1, 3.1.1994,  p. 3 (the “EEA  Agreement”)

3        Publication in the Official  Journal of the European Union No C 65, 25.02.2021,   p. 16.

4        Notifying Parties’ response to RFI 7. The Notifying Parties submit that the Belgian State does not control a company that is active in the same market or upstream / downstream of the JV. In light of this, while the Belgian State is Proximus’ largest shareholder, the Commission considers that, in any event, it is not necessary for the Commission to reach a definitive conclusion on the independence of Proximus from the Belgian State as the Transaction does not raise serious doubts as to its compatibility with the internal market regardless of whether or not Proximus has an independent power of decision  from the Belgian state.

5        This JV constitutes a newly-created undertaking (see paragraph 139 of the Commission Consolidated Jurisdictional Notice under Council Regulation (EC) No 139/2004 on the control of  concentrations between undertakings).

6        The JV’s future activity is about passive access allowing service providers to “physically” rent the JV’s first-mile infrastructure. “Passive” (also referred to as “unlit” or “dark” services) means that there is no active equipment on the infrastructure to which access is provided. It is the responsibility of the service provider to build this extra layer (OSI model) in order to offer services and connectivity to end-customers. The passive point-to-point FTTH network includes: (i) infrastructure (i.e. physical elements that are required to build the FTTH network such as trenches, ducts and poles (areal) on which the network is deployed); and (ii) passive network layer (i.e. the physical elements that are required to build the FTTH Network such as the optical fiber cables, fiber enclosures, optical distribution frames, patch panels and splicing shelves).

7        The “dense passive FFTH network” covers a full and blanket coverage of all possible connections in a given area. Thus, a dense passive network can be used as an alternative to for example the traditional copper network infrastructure of an operator like Proximus. FTTH is one of the configurations of “Fiber- To-The-X” (“FTTx”). FTTx is a generic term for a telecommunications (optical  fiber)  network architecture that is used within the local loop – the last leg of the network that spans between the end-user

premises and the edge of the carrier network – and delivers broadband connections to homes and places of business.

8        Article 7.3.2 of the SSHA.

9        Article 10.1.3 of the SSHA.

10      Articles 8.3.2 and 11.1.4  of the SSHA.

11      Schedule 1 of the SSHA. This relates for instance to any decision to approve a Budget that is not consistent with the principles of the Business Plan.

12      Form CO, paragraphs 36-37.

13      Form CO, paragraph 38.

14      In the present case, there are strong indications that the Parties will have access to the JV’s infrastructure at market terms. First, Proximus provides a “take-or-pay” commitment to  the  JV  and  will  gradually migrate its existing broadband customers to the passive fiber infrastructure services that it will purchase from the JV. According to the Notifying Parties, Proximus is expected to generate […] of the JV’s total revenue in 2025, but this figure will decrease as other operators would be interested in the JV’s wholesale offer. Such an expectation is also reflected in the business plan (Schedule 6 of the SSHA). See also Q1 – Questionnaire to market participants – telecommunications Belgium, response to question 24, where a number of respondents confirmed that they consider it critical or important to obtain access to the JV’s infrastructure. Second, the JV’s FTTH network will be open and neutral, offering passive access to third parties on the basis of non-discriminatory pricing. This means that each purchaser will be offered the same price per comparable unit regardless of the aggregate volume or amount of units purchased by such purchaser (including Proximus). These non-discriminatory pricing models are contained in Annex 2 to Schedule 3 of the SSHA (Master Services Agreement on wholesale access). Finally,  the Commission recalls that Nexus, one of the parents of the JV together with Proximus, is not active on any of the telecommunication markets in Belgium and therefore, will not have any incentive to limit the  JV’s wholesale revenues by offering terms that are not at market price (see also paragraph (146)).

15      Form CO, paragraph 40.

16      Turnover calculated in accordance with Article 5 of the Merger Regulation.

17      LLU (local loop unbundling): unbundled (shared) access to metallic loops of the local access network in a number of local telecommunications exchanges (in particular in urban areas), as this is the most cost- efficient way for alternative operators to provide differentiated retail broadband services.

18      Commission decision of 9 July 2018 in case M.8808 – T-Mobile Austria/UPC Austria, paragraph 73; of 4 February 2016 in case M.7637 – Liberty Global/BASE Belgium, recital 164.

19      Commission decision of 9 July 2018 in  case M.8808  –  T-Mobile Austria/UPC Austria, paragraph 76; of 20 September 2013 in case M.6990 – Vodafone/Kabel Deutschland, paragraph 161;  of 29 June 2009 in case M.5532 – Carphone Warehouse/Tiscali UK, paragraphs 28- 34; of 4 February 2016 in case M.7637 – Liberty Global/BASE Belgium, recital 164.

20      Commission decision of 9 July 2018 in  case M.8808  –  T-Mobile Austria/UPC Austria, paragraph 76; of 20 September 2013 in case M.6990 – Vodafone/Kabel Deutschland, paragraph 161;  of 29 June 2009 in case M.5532 – Carphone Warehouse/Tiscali UK, paragraphs 28- 34; of 4 February 2016 in case M.7637 – Liberty Global/BASE Belgium, recital 164.

21      Commission decision of 24 October 2014 in case M.7307 – Electricity Supply  Board/Vodafone Ireland/JV, paragraph 22; of 29 June 2009 in case M.5532 – Carphone Warehouse/Tiscali UK, paragraph 33.

22      Standalone DSL access is, by definition, related to the use of a copper network only as the underlying access infrastructure for the provision of this service, given that the xDSL-technologies are specific to such copper infrastructure.

23      Commission decision of 4 February 2016 in case M.7637 – Liberty Global/BASE Belgium, recitals 165-  168, of 30 June 2020 in case M.9757 – Providence/VOO/Brutélé, paragraphs 71-74.

24      European Commission's Recommendation on relevant product market and service markets within the electronic communications sector susceptible to ex ante regulation in accordance with Directive 2000/21/EC of the European Parliament and of the Council on a common regulatory framework for electronic communications networks and services, 9 October 2014 (hereinafter the " 2014 Recommendation").

25      The Commission published an updated recommendation in 2020, i.e. European Commission’s Recommendation on relevant product and service markets within the electronic communications sec tor susceptible to ex ante regulation in accordance with Directive (EU) 2018/1972 of the European Parliament and of the Council of 11 December 2018 establishing the European Electronic Communications Code , 18 December 2020 (hereinafter the “2020 Recommendation”).

26      BIPT, CSA, Medienrat, Vlaams regulator voor Media, Conferentie van regulatoren voor de elektronische communicatiesector, 29 June 2018, Analyse van de markten voor breedband en televisieomroep, paragraphs 1003 and 1015 (hereinafter the “BIPT decision of 29 June 2018”).

27      The BIPT concluded in the direction of technology segmentation (DSL and cable), i.e. excluding forms of local access on the cable networks (and access to the FTTO) because it did not consider that these were substitutable forms of access, both from a demand and a supply side.

28      Q1 – Questionnaire to market participants – telecommunications Belgium,  response to question 17.

29      Q1 – Questionnaire to market participants – telecommunications Belgium,  response to question 17.2.

30      BIPT decision of 29 June 2018, paragraphs 1003 and 1015. The BIPT concluded in the direction of technology segmentation (DSL and cable), i.e. excluding forms of local access on the cable networks (and access to the FTTO) because it did not consider that thes e were substitutable forms of access, both from a demand and a supply side.

31      Q1 – Questionnaire to market participants – telecommunications Belgium,  response to question 17.1.

32      Q1 – Questionnaire to market participants – telecommunications Belgium,  response to question 17.1.

33      Commission decision of 4 February 2016 in case M.7637 – Liberty Global/BASE Belgium, recital 172; of  29 June 2009 in case M.5532  – Carphone Warehouse/Tiscali UK, paragraphs 48-53.

34      Commission decision of 30 June 2020  in case M.9757 – Providence/VOO/Brutélé, paragraph 79.

35      Form CO, paragraphs 92 (regarding the overall wholesale broadband access market) and 107 (regarding the wholesale local broadband access market). According to the Notifying Parties, this is due to differences between the different regions and, specifically, between the different cable zones .

36      Q1 – Questionnaire to market participants – telecommunications Belgium,  response to question 18.

37      Q1 – Questionnaire to market participants – telecommunications Belgium,  response to question 18.

38      BIPT decision of 29 June 2018,  Section S9.1-9.4  (page 32).

39      Commission decision of 18 July 2019 in case M.8864 – Vodafone/Certain Liberty Global Assets, recital 196.

40      Commission decision of 18 July 2019 in case M.8864 – Vodafone/Certain Liberty Global Assets, recital 199; of 4 February 2016 in case M.7637 – Liberty Global/BASE Belgium, recital 146; of 14 April 2014 in case M.7109 – Deutsche Telecom/GTS, paragraph 70.

41      Commission decision of 18 July 2019 in case M.8864 – Vodafone/Certain Liberty Global Assets, recital 201; of 14 April 2014  in case M.7109 – Deutsche Telecom/GTS, paragraph 70.

42      Form CO, paragraph 125.

43      Annex to the Commission Recommendation on relevant product and service markets within the electronic communications sector susceptible to ex ante regulation in accordance with Directive (EU) 2018/1972 of the European Parliament and of the Council of 11 December 2018 establishing the European Electronic Communications Code (the “2020 Recommendation”).

44      BIPT, 13 December 2019, Analyse van de markt voor hoogwaardige toegang, paragraphs 399; 423. According to the BIPT, the market for wholesale high quality includes: (i) all high -quality access services (whether or not they include a trunk segment); (ii) all Ethernet services, WDM leased lines and SDH leased lines, (iii) all point-to-point, point-to-multipoint and multipoint-to-multipoint Ethernet services; (iv) both “access” and “backhaul” type services; and (v) all of these high-quality access services independently of their speed (hereinafter the “BIPT decision of 13 December 2019”).

45      Q1 – Questionnaire to market participants – telecommunications Belgium,  response to question 19.

46      BIPT decision of 13 December 2019,  paragraphs 399-423.

47      Q1 – Questionnaire to market participants – telecommunications Belgium,  response to question 19.3.

48      BIPT decision of 13 December 2019, paragraph 392. Translation from: “392. […] In geval van een kleine maar blijvende prijsverhoging van de hoogwaardige lijn zal de gebruiker van een hoogwaardige lijn niet migreren naar een dienst voor dark fibre, omdat hij dan deze onmisbare functies niet heeft om zijn eigen klanten een gewaarborgde dienst te kunnen verstrekken .”

49      Q1 – Questionnaire to market participants – telecommunications Belgium,  response to question 19.2.

50      Commission decision of 3 July 2012 in case M.6584 -Vodafone/Cable & Wireless, paragraph 31; of 4 February 2016 in case M.7637 - Liberty Global/BASE Belgium, recital 148; of 14 April 2014 in case M.7109 - Deutsche Telecom/GTS, paragraph 74; of 18 July 2019 in case M.8864 –  Vodafone/Certain Liberty Global Assets, recital 201.

51      Form CO, paragraph 136 and BIPT  decision of 13 December 2019,  paragraph 420.

52      Q1 – Questionnaire to market participants – telecommunications Belgium,  response to question 20.

53      BIPT decision of 13 December 2019,  paragraph 420.

54      Commission  decision of 1 September 2016 in case M.7758 – Hutchison 3G Italy / Wind / JV, recital 118;  of 30 May 2018 in case M.7000 – Liberty Global/Ziggo, paragraph 199.

55      Commission decision of 18 July 2019 in case M.8864 – Vodafone/Certain Liberty Global Assets, recital 65; of 27 November 2018 in case M.8792  –  T-Mobile NL/Tele2  NL, recital 202;  of 4 February  2016 in case M.7637 – Liberty Global/BASE Belgium, recitals 32-35; of 1 September 2016 in case M.7758 – Hutchison 3G Italy/Wind/JV, recitals 146-149; of 3 August 2016 in case M.7978 – Vodafone/Liberty Global/Dutch JV, paragraph 74; of 11 May 2016 in case M.7612 – Hutchison 3G UK/Telefónica UK, recitals 255, 261, 270, 279, 287; of 2 July 2014 in case M.7018 – Telefónica Deutschland/E-Plus, recitals 31-55; of 30 May 2018 in case M.7000 – Liberty Global/Ziggo, paragraph 206; of 28 May 2014 in case M.6992 – Hutchison 3G UK/Telefónica Ireland , recital 141; of 12 December 2012 in case M.6497 – Hutchison 3G Austria/Orange Austria, recital 58.

56      Commission decisions of 8 October 2018 in case M.8842 – Tele2/Com Hem, recital 47; of 1 September  2016 in case M.7758 – Hutchison 3G Italy/Wind/JV, recitals 149 and 161; of 3 August 2016 in case  M.7978 – Vodafone/Liberty Global/Dutch JV, recital 74; of 11 May 2016 in case M.7612 – Hutchison 3G UK/Telefónica UK, recitals 255, 261, 270, 279, 287; of 2 July 2014 in case M.7018 – Telefónica Deutschland/E-Plus, recitals 31 to 55; of 10 October 2014 in case M.7000 – Liberty Global/Ziggo, recital 141; of 28 May 2014 in case M.6992 – Hutchison 3G UK/Telefónica Ireland, recital 141; of 12 December 2012 in case M.6497 – Hutchison 3G Austria/Orange Austria, recital 58.

57      Form CO, paragraph 168.

58      Q1 – Questionnaire to market participants – telecommunications Belgium,  response to question 7.

59      Commission decision of 15 July 2019 in case M.9370, Telenor/DNA; of 27 July 2018 in case M.8883, PPF/Telenor Target Companies; of 27 November 2018 in case M.8792, T-Mobile NL/Tele2 NL, of 4 February 2016 in case M.7637 – Liberty Global/BASE Belgium, recitals 32-35.

60      Form CO, paragraph 168.

61      Q1 – Questionnaire to market participants – telecommunications Belgium,  response to question 8.

62      Commission decision of 18 July 2019 in  case M.8864 –  Vodafone/Certain Liberty Global Assets, recital 33.

63      Commission decision of 29 January 2010 in case M.5730 – Telefónica/Hansenet Telekommunikation , paragraphs 16-17; of 29 June 2009 in case M.5532 – Carphone Warehouse/Tiscali UK, paragraphs 35-39;  of 7 September 2005 in case M.3914 – Tele2/Versatel, paragraph 10.

64      Commission decision of 30 June 2020 in case M.9757 – Providence/VOO/Brutélé, paragraph 40; of 4 February 2016 in  case M.7637 – Liberty Global/BASE Belgium, recitals 67-69; of 3 August 2016 in    case

M.7978, Vodafone/Liberty Global/Dutch JV, paragraphs  25-26;  of 20 September 2013 in  case M.6990   –

Vodafone/Kabel Deutschland, paragraph 131.

65      Form CO, paragraph 186.

66      Q1 – Questionnaire to market participants – telecommunications Belgium,  response to question 9.

67      Commission decision of 29 January 2010 in case M.5730 – Telefónica/Hansenet Telekommunikation , paragraphs 16-17; of 29 June 2009 in case M.5532 – Carphone Warehouse/Tiscali UK, paragraphs 35-39;  of 7 September 2005 in case M.3914 – Tele2/Versatel, paragraph 10.

68      Commission  decision of 4 February 2016 in case M.7637 – Liberty Global/BASE Belgium, recital 73.

69      Commission decision of 30 May 2018 in case M.7000 – Liberty Global/Ziggo, paragraph 150; of 19 May 2015 in case M.7421 - Orange/Jazztel, recital 37; of 3 August 2016 in case M.7978 – Vodafone/Liberty Global/Dutch JV, paragraph 29.

70      Form CO, paragraph 187.

71      Q1 – Questionnaire to market participants – telecommunications Belgium, response to question 10. One respondent notes that the market is national given that “both Proximus and Orange operate a nationwide fixed  infrastructure,  they  have  nation-wide  product  offerings  at  uniform prices and they compete at

national level. […] Proximus’ and Orange’s commercial practice shows that the conditions of competition at national level are homogeneous.[…] ”.

72      Q1 – Questionnaire to market participants – telecommunications Belgium,  response to question 10.

73      Commission decision of 30 June 2020 in case M.9757 – Providence/VOO/Brutélé, paragraph  45;  of 18 July 2019 in case M.8864 – Vodafone/Certain Liberty Global Assets, recital 47.

74      Commission decisions of 8 October 2018 in case M.8842 - Tele2/Com Hem, paragraph 26; of 7 October 2016 in case M.8131 - Tele2 Sverige/TDC Sverige, recital 32; of 19 May 2015 in case M.7421 - Orange/Jazztel, recital 42; of 10 October 2014 in case M.7000 - Liberty Global/Ziggo, recital 132.

75      Commission decisions of 12 November 2019 in case M.9064 – Telia Company/Bonnier Broadcasting Holding, recital 218; of 8 October 2018 in case M.8842 – Tele2/Com Hem, paragraph 26;  of 3 August 2016 in case M.7978 – Vodafone/Liberty Global/Dutch JV, recital 38; of 20 September 2013 in case M.6990 - Vodafone/Kabel Deutschland, recital 194.

76      Commission decision of 30 June 2020  in case M.9757 – Providence/VOO/Brutélé, paragraphs 46-48.

77      Commission decision of 18 July 2019 in  case M.8864  –  Vodafone/Certain Liberty Global Assets, recital 56.

78      Commission decision of 18 July 2019 in  case M.8864  –  Vodafone/Certain Liberty Global Assets, recital 51.

79      Form CO, paragraph 178.

80      Q1 – Questionnaire to market participants – telecommunications Belgium,  response to question 11.

81      Q1 – Questionnaire to market participants – telecommunications Belgium,  response to question 11.2.1.

82      Q1 – Questionnaire to market participants – telecommunications Belgium,  response to question 11.2.2.

83      Commission decisions of 12 November 2019 in case M.9064 – Telia Company/Bonnier Broadcasting Holding, recital 239; of 8 October 2018 in case M.8842 – Tele2/Com Hem; of 3 August 2016 in case M.7978 – Vodafone/Liberty Global/Dutch JV, recital 40; of 20 September 2013 in case M.6990 - Vodafone/Kabel Deutschland, recital 197.

84      Commission decision of 30 June 2020  in case M.9757 – Providence/VOO/Brutélé, paragraph 52.

85      Form CO, paragraphs 107  and 179  and BIPT decision of 29 June 2018,  paragraph 255.

86      Q1 – Questionnaire to market participants – telecommunications Belgium,  response to question 12.

87      Q1 – Questionnaire to market participants – telecommunications Belgium,  response to question 12.

88      Q1 – Questionnaire to market participants – telecommunications Belgium,  response to question 11.

89      Commission decision of 18 July 2019 in case M.8864 – Vodafone/Certain Liberty Global Assets, recital 166; of 9 July 2018 in case M.8808 – T-Mobile Austria/UPC Austria, paragraph 65.

90      Virtual Private Network (“VPN”).

91      Commission decision of 14 April 2014 in case M.7109 – Deutsche Telecom/GTS, paragraph 26; of 29 January 2010 in case M.5730 – Telefónica/Hansenet Telekommunikation , paragraphs 6 and subsequent.

92      Commission decision of 18 July 2019 in case M.8864 – Vodafone/Certain Liberty Global Assets, recital 171; of 3 August 2016 in case M.7978 – Vodafone/Liberty Global/Dutch JV, paragraphs 126-127.

93      Form CO, paragraph 196. The Notifying Parties refer to the BIPT’s position. BIPT decision of  13 December 2019, paragraph 190. The BIPT considers that all high-quality services allowing to satisfy those higher/tailored needs of businesses are considered as sufficiently interchangeable and therefore part of the same market, i.e. (i) classical leased lines, (ii) leased lines with high speed on WDM, (iii) connectivity based on Tline of circuit emulation, (iv) connectivity based on E-line, and (v) connectivity based on E- LAN. Moreover, the BIPT finds that high-quality connectivity services include both P2P connections (i.e., classical leased lines with traditional interfaces or Ethernet interfaces, new generation leased lines or Ethernet services) and P2MP service.

94      Q1 – Questionnaire to market participants – telecommunications Belgium,  response to question 13.

95      Q1 – Questionnaire to market participants – telecommunications Belgium,  response to question 13.2.

96      Commission decision of 18 July 2019 in case M.8864 – Vodafone/Certain Liberty Global Assets, recital 176; of 14 April 2014 in case M.7109 – Deutsche Telecom/GTS, paragraph 30; of 3 July 2012 in case M.6584 -Vodafone/Cable & Wireless, paragraph 10; of 29 January 2010 in case M.5730 – Telefónica/Hansenet Telekommunikation , paragraph 28.

97      Form CO, paragraph 197.

98      Q1 – Questionnaire to market participants – telecommunications Belgium,  response to question 14.

99      Commission decision of 30 June 2020  in case M.9757 – Providence/VOO/Brutélé, paragraph 54.

100    Commission decision of 30 June 2020 in case M.9757 – Providence/VOO/Brutélé, paragraph 60; of 4 February 2016 in case M.7637 – Liberty Global/BASE Belgium, recital 98.

101    Commission decision of 30 June 2020  in case M.9757 – Providence/VOO/Brutélé, paragraph 54.

102    BIPT decision of 29 June 2018,  paragraphs 3303-3306.

103    Form CO, paragraphs 207-209.

104    BIPT decision of 29 June 2018,  paragraphs 3303-3306.

105    Q1 – Questionnaire to market participants – telecommunications Belgium,  response to question 15.

106    Q1 – Questionnaire to market participants – telecommunications Belgium,  response to question 15.

107    BIPT decision of 29 June 2018,  Section 10.2.

108    Explanatory  Notes to the 2014 and 2020 Recommendations.

109    Explanatory Note to the 2014 Recommendation, page 18. See also  Commission  decision  of 30 June 2020 in case M.9757 – Providence/VOO/Brutélé, paragraph 59.

110    Commission decisions of 3 August 2016 in case M.7978 – Vodafone/Liberty Global/Dutch JV, paragraphs 112;  of 19 May 2015 in  case M.7421 - Orange/Jazztel, recitals 89-90; of 10 October 2014 in case  M.7000

- Liberty Global/Ziggo, recitals 152-153; of 20 September 2013 in case M.6990 - Vodafone/Kabel Deutschland, paragraphs 263-265;  of 16 June 2011 in case M.5900  - LGI/KBW, paragraphs 183-186

111    Commission decision of 30 June 2020  in case M.9757 – Providence/VOO/Brutélé, paragraphs 63-64.

112    Q1 – Questionnaire to market participants – telecommunications Belgium,  response to question 15.

113    With regard to the application of the Merger Regulation in the EEA, see Annex XIV to the EEA Agreement.

114    Guidelines on the assessment of non-horizontal mergers under the Council Regulation on the control of concentrations between undertakings ("Non-Horizontal Merger Guidelines"), OJ C 265, 18.10.2008, paragraph 7.

115    Guidelines on the assessment of horizontal mergers under the Council Regulation on the control of concentrations between undertakings ("Horizontal Merger Guid elines"), OJ C 31, 5.2.2004, paragraphs 27 and following.

116    Non-Horizontal Merger Guidelines, paragraphs 34-35.

117    Non-Horizontal Merger Guidelines, paragraph 32.

118    Non-Horizontal Merger Guidelines, paragraph 58.

119    Non-Horizontal Merger Guidelines, paragraph 59.

120    All market shares of the Notifying Parties are volume-based, unless specified otherwise.

121    Note that the wholesale resale broadband access market is included in a potential overall wholesale broadband access market. Therefore, this market is only considered downstream from the potential narrower wholesale local access broadband market (see paragraph (24) above).

122    Form CO, paragraph 457.

123    Form CO, Annex 18.

124    Form CO, Annex 18. The Notifying Parties clarify that these figures exclude cable operators, in line with the BIPT’s analysis and in view of the still hypothetical nature of such offer for local access to the cable networks.

125    BIPT decision of 29 June 2018,  paragraph 1020.

126    Form CO, Annex 18.

127    Form CO, paragraph 295.

128    BIPT decision of 29 June 2018,  paragraph 296.

129    BIPT decision of 29 June 2018,  paragraph 296.

130    Form CO, paragraph 226.

131    BIPT decision of 29 June 2018,  paragraph 1020.

132    Form CO, paragraph 297.

133    BIPT decision of 29 June 2018,  paragraph 1020.

134    Form CO, paragraph 300.

135    Form CO, paragraph 298.

136    Form CO, paragraph 299.

137    Form CO, Annex 18. This market share is based on Proximus’ market  share  in  the last financial year (2019)  and the JV’s  expected market share in 2022.

138    Form CO, Annex 18.

139    Form CO, paragraph 299.

140    Q1 – Questionnaire to market participants – telecommunications Belgium, response to question 21. Emphasis added.

141    Q1 – Questionnaire to market participants – telecommunications Belgium, response to question 21. Emphasis added.

142    Q1 – Questionnaire to market participants – telecommunications Belgium,  response to question 23.

143    BIPT decision of 29 June 2018,  Section S.2.

144    Form CO, Annex 18.

145    The same figures apply irrespective of whether the market is limited to  DSL distribution  technology or not.

146    Form CO, Annex 18.

147    Form CO, Annex 18.

148    Form CO, Annex 18. The Notifying Parties confirm that if the wholesale broadband resale  market  is limited  to the resale offers  provided by Proximus, Proximus  would – by definition – hold a market share  of [90-100]% on said market, which represents however a limited number of lines that are sold t o third parties (approximately [...] in total). However, based on publicly available information, the Notifying Parties cannot exclude that a resale-like offer currently exists on other network infrastructure, in particular on the cable infrastructure of Telenet (see https://www2.telenet.be/nl/business/sector/carriers/).

149    Form CO, Annex 18. Proximus has an approx. [50-60]% market share at the national level and at the level of its footprint. Figures are not available at the regional level or at the level of the cable operator’s coverage area.

150    Form CO, Annex 18. According to the BIPT’s Communication of 30 June 2020, market shares on a hypothetical market for multiple-play services would be between 40% and 50%. All market share figures quoted are at the national level.

151    Form CO, paragraph 313.

152    Form CO, paragraph 314.

153    Form CO, paragraph 315.

154    Market 1: wholesale local access provided at a fixed location of the European Commission, 18 December 2020, Recommendation on relevant product and service markets within the electronic communications sector susceptible to ex ante regulation in accordance with Directive (EU) 2018/1972 of the European Parliament and of the Council of 11 December 2018 establishing the European Electronic  Communications Code (former Market 3a: wholesale local access provided at a fixed location of the Commission Recommendation of 9 October 2014 on relevant product and service markets within the electronic communications sector susceptible to ex ante regulation in accordance with Directive 2002/21/EC of the European Parliament and of the Council on a common regulatory framework for electronic communications networks and services (2014/710/EU).

155    BIPT, decision of 29 June 2018.

156    See also European Commission comments pursuant to Article 7(3) of  Directive  2002/21/EC  in Commission decision in Case DE/2019/2200: Wholesale local access provided at a fixed location in Germany, page 9 regarding a JV between DT and EWE. The Commission determined that a different interpretation (i.e. where the SMPT designation would not extend to the JV) would result in regulatory gaming allowing the SMP operator to circumvent the SMP status by simply setting up a new legal entity.

157    Form CO, paragraph 300.

158    The JV’s activities are limited to the provision of physical unbundled (i.e. passive) access to the fiber local loop.

159    BIPT,  decision of 29 June 2018,  S2.3 (page 35).

160    BIPT,  decision of 29 June 2018,  S21 (page 36).

161    The Notifying Parties do not have reliable market data available on the number of wholesale broadband local access lines currently offered by the various operators. According to the BIPT’s market analysis decision of 29 June 2018, which identified a market for wholesale broadband local access including both copper- and fiber-technologies, Proximus was the only player on this market. A broader market would include the cable operators (Telenet, Brutélé and VOO/Nethys ).

162    BIPT,  decision of 29 June 2018,  S9.4 (page 32).

163    Q1 – Questionnaire to market participants – telecommunications Belgium,  response to question 22.

164    BIPT decision of 29 June 2018,  paragraph 1496.

165    Notifying Parties’ response to RFI 8, question 2 and BIPT decision of 29 June 2018, paragraph 1500.

166    Call  with BIPT, 4 March 2021.

167    Q1 – Questionnaire to market participants – telecommunications Belgium,  response to questions 25-27.

168    Form CO, paragraph 314.

169    Q1 – Questionnaire to market participants – telecommunications Belgium,  response to questions 29-31.

170    Form CO, paragraphs 320-324.

171    The Notifying Parties will not contribute assets or existing activities to the JV.

172    Notifying Parties’ response to RFI 8, question 1.

173    Q1 – Questionnaire to market participants – telecommunications Belgium,  response to question 28.