The Guernsey Competition & Regulatory Authority yesterday accused the two telcos of ‘hard-core competition law restriction’ as it provisionally found they had infringed the island’s competition law, a claim both have vigorously denied.
Issuing infringement proceedings against them, the GRCA said: ‘Sure and JT colluded by sharing commercial information and agreeing secretly that JT would pull out of operating existing 4G and future 5G mobile networks in Guernsey, in return for Sure doing the same in Jersey.
‘This agreement to trade mobile network infrastructure would have given each of JT and Sure a far stronger position as mobile network providers in their home island achieved not by fair and open competition but through a secret anti-competitive arrangement.’
The watchdog said it had concluded provisionally that this collusion took place for more than a year.
‘The material available to the authority gives sufficient reason to believe that the parties had been engaged in a hard-core competition law restriction, attempting to divide up the Channel Island mobile network markets in a secret arrangement between them.’
The GCRA said the evidence it had obtained suggested that JT and Sure were aware at a senior level that their behaviour was likely to raise concerns, but used phrases like ‘network sharing’ and ‘infrastructure sharing’ to describe their objectives.
‘Network sharing of mobile mast infrastructure is positive as it reduces mobile mast density and can be more efficient because it avoids unnecessary duplication of infrastructure. It is encouraged by governments and regulators around the world, including in Guernsey,' it said.
‘However, the evidence from information the authority has obtained suggests that JT and Sure agreed between them that Sure would acquire JT’s mobile network infrastructure in Guernsey by trading its mobile network infrastructure in Jersey and vice versa and, subsequently, each of Sure and JT would construct the single standalone 5G network in its “home” island.
‘This is not mobile network sharing. It is market sharing between competitors, which is illegal.’
It went on to say competitors could cooperate, but had to do so ‘accountably and transparently’ if competition law applied to them – and such agreements could benefit consumers.
‘Parties therefore have a facility available to them in the competition law that enables a case to be made to the authority for assessment, and where the case is persuasive the parties are given an exemption under the law.
‘The parties did not make their discussions known nor did they request this facility available to them in competition law which would have brought greater accountability and transparency of their behaviour.’
The impact of competitors engaging in ‘cartel behaviour’ resulted in poorer value for money, less innovation and less choice for consumers, the regulator said.