Guidelines for assessing whether telecoms companies have significant market power were published today by Oftel.
Under new EU Directives which entered into force earlier this year, significant
market power (SMP) is the key consideration for assessing whether a market is
effectively competitive.
If a company is found to have SMP in a specific market, Oftel will have the
power to impose additional regulation to safeguard competition and protect consumers.
The new Directives require national regulators to carry out reviews of competition
in electronic communications markets by 24 July 2003.
Oftel's strategy already includes a programme of rolling market reviews, and
Oftel is well placed to meet the EC's demanding timetable.
Oftel's guidelines, which complement guidelines published by the EC, set out
key criteria for deciding whether a company has significant market power.
Indicators of SMP include the size of a company's market share and possible
barriers to market entry - how easy it is for competitors to enter the market.
Oftel's guidelines state that it will also consider other factors that may provide
extra detail about the level of competition - for example how easy it is for
consumers to switch between suppliers.
The new guidelines update Oftel's Effective competition review guidelines to
take account of the new Directives.
David Edmonds, Director General of Telecommunications, said:
"Oftel's guidelines ensure that stakeholders can see how Oftel will assess
competition and how it will apply each of the criteria set by the EC.
"It is important that the process is transparent so that stakeholders can
participate fully in the review process.
"Oftel is well placed to meet the demanding timetable set by the EC, and
has already begun work to prepare for the reviews.
"As well as the criteria set out by the EC, Oftel will be considering additional
indicators that it uses in conducting market reviews, for example whether there
are any barriers to switching which might be impeding the development of competition."
