In 2021 the BIPT examined, at portfolio level, whether the operators with a significant market power (Proximus, Telenet, Brutélé and VOO SA) use rates that may result in a price squeeze (or margin squeeze). We talk of a price squeeze or margin squeeze when the margin between all relevant revenues and the wholesale costs is no longer sufficient to cover the own network and retail costs, including a reasonable return on capital.

At the time, this portfolio price squeeze test was conducted at a relevant aggregation level, in compliance with the Guidelines of 22 June 2021, i.e. the portfolio of the flagship products of the mentioned operators. The BIPT did not find price squeeze practices at portfolio level in 2021.

However, we cannot rule out that an operator with significant market power does develop retail offers that are hard to replicate from an economic point of view and are positioned specifically in certain market segments aimed at by alternative operators. In such cases it is justifiable to supplement the portfolio test with a test at the level of individual products.

Recently, the BIPT conducted a test at the level of individual products following a complaint by edpnet regarding certain fibre-based retail internet subscriptions offered by Proximus and its brand Scarlet. Without prejudice to the test results for Proximus’s portfolio and in light of the circumstances, a price squeeze test based on the specific individual products aimed at in edpnet’s complaint, is justified considering the importance these products hold for the alternative operators.

The test results, however, show that no negative margins can be found at product level when taking into account the relevant incremental costs and revenue, as well as the share of customers who are served based on bitstream xDSL (copper) or bitstream GPON (fibre). Consequently, edpnet’s complaint is rejected.

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