Margin squeeze possibly constitutes a threat to competition on the electronic communications markets, especially as regards broadband Internet access and high-quality connectivity. Margin squeeze occurs when a vertically integrated operator with significant market power (SMP) at the wholesale level sets his retail or wholesale prices in such a manner that the margin between the costs of the wholesale input and the retail prices is insufficient to enable a competitor to offer similar retail products.
To tackle the competition problems a ban was imposed on SMP operators to practise margin squeeze by the CRC in its Decision of 29 June 2018 regarding the analysis of the broadband and television broadcasting markets and by the BIPT in its Decision of 13 December 2019 on the analysis of the high-quality access market. The operators identified in the context of those decisions as having SMP are Proximus and the cable operators in their respective coverage zones.
In order to make the ban on margin squeeze concrete, the BIPT publishes guidelines setting out the principles it will follow to investigate a margin squeeze. Those guidelines replace those that were laid down in the 22 June 2021 communication, in order to take account of the evolutions that have since taken place at the regulatory, commercial and technological level and also based on experiences gained in the context of a renewed performance of the tests.
As for the mass market the changes involve the treatment of the non-regulated mobile telephony component (principle 11), the separate consideration of results for Proximus fibre-based retail services (principle 3), the level of aggregation and a clarification of the notion of incremental margin for product tests (principle 3) and a better elaboration of the adapted EEO methodology (principle 5).
For the large business market, this concerns the terms of the test at the contract level, in case products are offered based on both Market 3/2014 and Market 4/2014 (principle 3) and how a situation is handled where one of the end-points of a line is situated in a competitive area and another end-point is situated in a non-competitive area (principle 4).
New provisions regarding the treatment of structural and temporary promotions (principle 6 and principle 13) concern both markets, so both the residential and the large business market.
These renewed guidelines replace the Communication of 22 June 2021 regarding the guidelines implementing margin squeeze tests.