Following a tender, won by the MATÁV kábelTV Ltd (hereinafter: MkTV), it applied for an authorisation of the Office of Economic Competition to purchase the cable television network, owned by the local government of Tata town.
The local government wanted to sell its cable television network since it could not see any possibilities to finance the high level of service and the technical development in the future.
The Competition Council stated that:
Under a concession contract MATÁV, having controlling right over MkTV, has the right to provide public phone services in 36 primer local areas, including Tata town, which covers 75 per cent of the market of Hungary. Under the concession contract MATÁV has exclusive right through 8 years, until the end of the year 2001. Cable television service is one of the wired telecommunication services.
The service provider of the cable television network generally has a monopoly on its own territory. This situation is similar in Tata as well therefore the change of owner itself would not arise special competition concerns.
The Competition Council took into consideration the expected effect of the planned transaction in the period of ongoing liberalisation and stated that the access to the network will also be one of the goods in the liberalised period and by that time both the wired public telecommunication network and the cable television network will be the properties of MATÁV which situation considerably impedes the formation of effective competition on the relevant market.
In the view of the Competition Council, on one hand, the planned transaction would strengthen the dominant position of MATÁV during the preparation phase to the liberalised period. On the other hand the Competition Council questioned MATÁV`s being the best bidder from the aspect of consumer welfare while it has not doubted that MATÁV is able to provide all the modern technical changes that the local government could not. These advantages, however, could be provided by other bidders as well, resulting in reasonably higher advantages from the competition point of view on the liberalised market which will be brought about within 2 years.
Considering these facts the Competition Council refused to give the authorisation to MkTV on the purchase of the local cable television network.
June 6, 2000. Budapest
dr. Bodócsi András sk. előadó
Fógel Jánosné dr. sk.
dr. Sólyom Eszter sk.