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Vodafone disagrees with the approval of the acquisition of Tele2 by Sonaecom without remedies

Lisbon, 3 September 2007 – In its capacity as an interested party, Vodafone Portugal has informed the Competition Authority (AdC) that it does not agree with the Authority’s draft decision to allow the Sonaecom/Tele2 Concentration Operation without conditions. Vodafone believes that the AdC has factual and legal grounds to make the approval of the Concentration Operation subject to certain undertakings because it could result in significant barriers to competition in the broadband Internet market in Portugal, to the detriment of consumers and to the development of this key market for the Information Society.

Mirroring the Opinion on this operation issued at the AdC’s request by the sector regulator, ICP-ANACOM, Vodafone argues that the AdC should ensure that the operation does not lead to “actions that will hinder competition in terms of the scarce resource represented by space in PT Comunicações exchanges for co-installation”. Space in PT Comunicações exchanges is a scarce resource and an essential infrastructure for the provision of broadband direct access services over local loops by competing companies.

If remedies are not implemented in connection with the Operation that ensure efficient use of the space in PT Comunicações exchanges, Sonaecom will end up unnecessarily occupying space in those exchanges corresponding to the space occupied at present by two or three operators (taking into account the announced purchase of ONI assets), which is manifestly disproportionate and restrictive of other operators’ access to that essential infrastructure. According to the Competition Law, “the opportunity of access to such infrastructures offered to competing companies” is a factor of enormous importance to the existence of “effective competition in the national market” for broadband Internet access, which the Competition Authority, in considering a concentration operation, has a duty to “preserve and develop”.

Vodafone Portugal accordingly believes that this Operation should not be approved unless Sonaecom and/or the company emerging from the Concentration undertakes to release, with a reasonable period (15 working days), the space unnecessarily occupied in PT Comunicações exchanges following the merger of the businesses of Sonaecom (Novis) and Tele2 and taking account also of the ONI assets.