Effects of Claro’s declaration of dominance in the mobile market
The sector telecommunications in Colombia I had been waiting for the last years for the decision that finally Communications Regulation Commission (CRC) took last Thursday, January 28. Know if Sure it has dominance in the mobile services market in the country.
(You may be interested in: ‘The first brushstrokes of Iván Duque on the tax reform’).
The CRC, through a statement, pointed out that after “a comprehensive competition analysis, the dominance of the cellular communication provider was found in the first instance Comcel (Clear) in the mobile service market, which corresponds to the joint provision of voice and mobile data services ”.
At that time, the regulatory authority clarified that dominance is a “preventive statement” about a market situation; therefore, it does not carry a sanction at the moment.
Likewise, the Commission indicated that the ruling is aimed at guaranteeing “healthy competition” in this market and that the decision corresponds to a first instance, therefore Sure still has an appeal.
A declaration of dominance in a sector, said an expert consulted by EL TIEMPO, establishes that a company has such power in the market that it determines its conditions and its competitors have to adapt to that, without them being able to create a clear rivalry.
“In different sectors of the economy, it can happen that companies acquire a dominant position, and that does not mean that they have done anything illegal,” says the analyst.
The decision taken at the end of January is in line with the one made by the CRC itself in 2009, when it declared that Comcel, now Sure, had dominance in voice service. The telecommunications company has led the mobile market in the country for several years.
According to the balance of the last quarter of 2020 made by the Ministry of ICT, the operator is the one with the most users in all of Colombia: in the mobile data service it has 16.8 million users and 32 million accounts in voice service. More than double the second operator with the most clients, which is Movistar, which provides data service to 7.3 million people and cell phone service to 15.7 million users.
So far, the announcement made by this commission is a first step in the process that triggers this declaration of dominance, according to experts, since the authority did not make a substantive decision on measures regarding Claro’s position in the market.
(Further: ‘The millionaire investments that the rise in the price of oil opens’).
During the announcement of the decision, the CRC specified that a regulatory determination may be made by both the Commission and the Superintendency of Industry and Commerce, in the event that you want to prevent abuse in the market by the operator.
For this reason, what is coming now is for the Commission to review whether there is a need to apply a series of regulations that will result in no concentration in the sector and this will lead to greater competition among all operators.
“The CRC has to start looking at what regulatory action it should take as a result of that statement, because a statement of dominant position alone has no effect. When the authorities declare that a company is in a dominant position, they must impose regulatory measures in order to encourage rivalry so that users benefit, ”says Jairo Rubio, former Superintendent of Industry and Commerce.
(Too: ‘Calculate how much they should pay you in interest on your severance payments this year’).
Jorge Fernando Negrete, an expert in telecommunications and general director of Mediatelecom Policy Law, also agrees on this point, who also adds that the CRC must enter to evaluate what are the measures that will allow the sector to be balanced.
“The Commission can choose an asymmetric regulation, where the dominant operator gives other operators access to its infrastructure services at a much lower price, in which it is even below the costs of the operation,” Negrete says.
Likewise, the expert assures that, in this sense, the regulatory authority should not only look at the size of the company in the market, but if it has anti-competitive practices, which will help determine what the sanction and regulatory measures will be.
Negrete also indicates that the decision could discourage Claro’s future investments in infrastructure, due to the fact that it is not clear whether they are going to have different rules of the game from those of other telecommunications companies.
Even so, Rubio indicates that the declaration of dominance could bring greater competition in the country’s market, “since the mobile telephony sector is one of the most concentrated in Colombia,” which would be reflected in tariff reductions.
The determination is now in the hands of the CRC, which must determine if it only keeps the declaration or if Claro must comply with new rules.
Find also in Economics:
Vanti extends payment term for natural gas facilities in Colombia
Call for employment was resumed at Dian; How are the deadlines?
Government will sign exclusivity with Ecopetrol for the offer for ISA
On Twitter: @ tecnósferaET