Denmark is one of the European frontrunners regarding very high capacity networks coverage – with 94% coverage in 2020, according to Digital Economy and Society Index (DESI). The successful coverage of advanced networks is due to regional fibre deployments largely driven by energy utility companies, and to the large footprint of cable networks.
In a series of draft measures notified on 3 November 2021 with regard to the high capacity infrastructure market, the Danish national regulatory authority, DBA, had identified 21 geographic markets in Denmark, corresponding to different electricity supply areas in the country. DBA found 17 of these 21 markets not to be competitive and 14 different operators (including 7 wholesale only operators) were found to have significant market power (“SMP”). With regard to these 14 operators, DBA proposed to impose regulatory obligations, or to make binding the commitments proposed by some of these operators. In particular, DBA proposed to impose, on the operator Aura, access, price control (cost orientation), non-discrimination and transparency obligations.
On 2 December 2021, the Commission issued its preliminary assessment of DBA’s draft measures. While the Commission had no objections to most of DBA’s analysis, it expressed serious doubts with regards to 5 geographic markets. These markets are characterized by a significant degree of infrastructure competition. In many cases, one or several networks present in these areas are commercially open (other operators can have access to these networks to provide services to their end-users). In light of this, the Commission considered that it was necessary to open an in-depth investigation into the proposed SMP designation of 5 operators (EWII, AURA, Energi Ikast, MES Fibernet and Nord Energi) in their respective geographic markets.
Following the opening of phase II by the Commission, DBA withdrew its notified draft measures concerning 4 of these 5 operators on 10 December 2021. As a result, the in-depth investigation was limited to the analysis regarding the operator Aura (geographic market Skanderborg-Odder). In its opinion delivered on 3 January, BEREC did not share the Commission’s serious doubts regarding this market.
In light of the elements gathered during the phase II investigation regarding the geographic market Skanderborg-Odder, it appears that Aura has been able to achieve a wide fibre coverage and is continuing its rollout. According to DBA’s estimates provided in the context of the phase II, despite the presence of cable networks in large parts of market, Aura has been able to regularly increase its market share over the last years, reaching a wholesale market share indicative of dominance in 2021. The market shares of its competitors have decreased in the same period, and there are no indications that this trend would reverse given Aura’s increased coverage. Finally, contrary to the situation prevailing in the four other markets subject to the Commission’s serious doubts, Aura’s network had not been commercially opened to other operators. While this operator has announced, during the phase II investigation, its decision to open its network, the elements provided by Aura and DBA indicate that this opening is still at an early stage. Therefore, it would be premature to conclude that the intention to open the network is, on its own, sufficient to enable sustainable competition on the retail market.
Based on above, the Commission lifted its serious doubts. DBA may therefore adopt the draft measure notified regarding the geographic market Skanderborg-Odder, which designated Aura as having SMP on this market and imposed regulatory obligations on this operator. With regard to the regulatory obligations to be imposed, DBA shall take utmost account of the comments issued by the Commission on 2 December 2021. The Commission’s decision in this case is available online on CIRCABC.