Once again, the BIPT has examined whether the significant market power operators (Telenet and VOO for the mass market and Proximus for both the mass market and the large business market) apply tariffs that could lead to margin squeeze. We talk of margin squeeze or price squeeze when the margin between all relevant revenues and the wholesale costs is not sufficient to cover the proper network and retail costs, including a reasonable return on capital.
Margin squeezes can severely distort competition and prejudice private and professional users by preventing new entries and growth of competitors or even expulsing alternative operators from the market.
The ban on SMP operators to practise margin squeeze was included as an obligation in the CRC Decision of 29 June 2018 regarding the analysis of the broadband and television broadcasting markets and in the BIPT Council Decision of 13 December 2019 on the analysis of the high-quality access market. The current terms of the test are mentioned in the BIPT Council Communication of 22 June 2021 regarding guidelines implementing margin squeeze tests.
Based on the recently performed tests, at the portfolio level for the mass market and at the level of contracts for the large business market, the BIPT has not found any margin squeeze practices that could lead to a notice of default.
The insights gained from conducting these tests have pushed the BIPT to adapt certain stipulations of its guidelines. The renewed guidelines replace the communication of 22 June 2021. Apart from that the BIPT publishes two communications in which the results of the tests are discussed.