
DECISION NO . 187 From 05.10.2005 Regarding the authorisation of the economic concentration realised by UGC Europe B.V. by taking the control over SC Astral Telecom SA THE PRESIDENT OF THE COMPETITION COUNCIL 1.Having regard to the Decree no 57/17.02.2004 regarding the appointment of the members of the Plenum of the Competition Council, 2.Having regard to the Competition Law no 21/1996 with subsequent amendments and completions, 3. Having regard to the Regulation for authorising the economic concentrations, 4. Having regard to the Regulation on organization, functioning and procedure of the Competition Council, with subsequent amendments and completions, 5. Having regard to the documents from the case file (RS – 121/29.07.2005) 6. Services Directorate Note (GM – 1626/04.10.2005) Taking into account: 1. At 29.07.2005, UGC Europe B.V. (hereinafter called UGCE)1 notified to the Competition Council the economic concentration operation realised by taking the control over SC Astral Telecom SA (hereinafter called Astral)2, under the provisions of art.10 alin.(2) lett.b) from the Competition law no.21/1996, republished (hereinafter called the law). 2. At 22.07.2005, through the shares selling-buying concluded between (i) Ghite Sorin Voicu, (ii) Pop Baldi Nicolae Dan (iii) Urasi Bela, (iv) Nicola Olimpiu Valentin, (v) Ciorcila Horia, (vi) Goia Ioan, (vii) Goia Dorel, (viii) Oprea Mariana Marinela, (ix) Dealgate Trading Limited, (x) Dixon Investments (Overseas) Limited, (xi) Bridgecom Holdings Limited, (xii) Worldfield Limited, (xiii) Cresianco Limited, as sellers and UGCE, as the buyer, the last one acquired 93,401311% of the Astral’s registered capital. In conformity with the concluded contract, the transaction will produce its effects under the condition of being approved by the Competition Council and of fulfilling all the suspensive clauses from the contract. 3. Through the notified economic concentration, UGCE obtains the direct sole control over Astral, detaining 93,401311% of the Astral’s registered capital. 1 Registered Office: Boeing Avenue 53, 1119 PE Schiphol Rijk; adresa postala Postbus 74763, 1070 BT, Amsterdam, Olanda; Commerece Register no. 33274976 2 Registered Office Cluj-Napoca, b-dul Constantin Brancusi nr. 147, jud. Cluj; Commerece Register no: J 12/4047/1993; Single Registration Code: 4985052 4. The acquire of the sole control over Astral by UGCE represents an economic concentration, as defined by art. 10 (2), lett. b from the law and by the Regulation regarding economic concentrations’ authorization. The turnovers of the parties involved in the operation, in 2004 (the year prior to the year when the operation took place) exceed de minimis thresholds foreseen at art. 14 from the law. 5. Notification became effective in 06.09.2005. 6. UGCE is directly controlled by United Pan Europe Communications NV, constitute in respect with the Holland’s laws. United Pan Europe Communications NV detains 100% of the registered capital and the afferent voting rights. UGCE is indirectly finally controlled by Liberty Global Inc, that mostly detains participations in telecommunications companies and TV companies, with the main operations in Europe, Asia and America. 7. UGCE is a financial holding. Pursuant to the constitutive act, its object of activity is: to constitute, to participate in any way, to administrate, to supervise, to control and to promote undertakings and businesses; to finance businesses and undertakings; to borrow, to land and to obtain funds, including bonds issuance, drafts or other public effects, to conclude contracts in regard with the mentioned activities or to conclude derived transactions; to council and to perform services for the undertakings with which the society forms a group; to guarantee, to oblige the society and to pawn its assets for the obligations of the undertakings with which forms a group and in the name of the third parties; to obtain, to sell, to administrate and to exploit registered properties and assets in general; to commercialize currencies, public effects and property elements, in general; to develop and to commercialize patents, commercial marks, licenses, know how and other industrial property rights; to perform any kind of industrial, financial or commercial activities; any kind of activity related to the mentioned ones or that favors these activities, in the wider sense of these terms. 8. Astral performs telecommunication activities (CAEN code 6420). This class implies: sound, images, data or other information transmission activities through cables, radio, relays or satellite; providing internet access; telephone, telegraph and telex communications; telecommunications systems’ maintenance; transmission of TV and radio programmes. Astral is part of an undertakings group active in the field of electronic communications (retransmission services for cable TV programmes and internet access services). 9. In Romania, the group of which UGCE is part includes SC UPC Romania SA (hereinafter called UPC) and SC Conex Sat SR:, undertakings active in the Astral’s field of activity. Pursuant to the notification, SC Focus Sat SA (hereinafter called as Focus Sat) is jointly controled by Chello Media Investments B.V. (member of UGCE) and by a number of 5 individuals. 10. The relevent market is the market on which the bought undertaking activates; Astral activates on the electronic communications market offering the consumers re- 2 transmission services for cable TV programmes, internet access services and fixed telephony services. 11. In this case, the product’s relevant market is defined as the market of cable TV programmes re-transmission services, the market of internet access services and the market of fixed telephony services. 12. The definition of the cable TV programmes re-transmission services has been settled through the Competition Council’s Plenum Decision no 135/1998. The relevant market definition issue remains open because of the convergence of the electronic communications, broadcasting and information technology sectors; other aspects related to the market technological development might appear in the future and this could lead to the need of adapting the object of market’s definition in the context of this new development. It is taken into account that the technological development in the electronic communications field might justify the re-definition of the products’ market, in the sense of TV programmes retransmission market, no matter what the used technology is (cable TV is only one option for re-transmitting the TV programmes). In Romania has been introduced the satellite digital technology DTH – direct to home, as an alternative for cable TV programmes retransmission. At this time there are three companies that offer TV programmes retransmission services on the entire territory of Romania, using DTH technology: RCS&RDS (Digi TV), Focus Sat si Digital Cable System (Max TV). 12.1 The main characteristics of DTH service are: satellite digital television, the possibility of installing in every house of Romania; the main programme package includes between 20 and 40 programmes; no exposure for third parties’ unauthorised interventions; the possibility to relocate the system without any supplementary cost. 12.2 In order to access DTH service, the client must acquire the antenna kit and the decode unit kit; their prices are variable for each undertaking. In order to access CATV service, the client must pay first the installation tariff, the installation tax and the materials needed for the process; these costs are also differentiated from an undertaking to another. For installing CATV service in houses/companies, the costs are similar to the ones for accessing DTH service (the costs are lower for installing the service in flats of blocks that are part of the network already). Pursuant to the notification, in order to diminish the existing difference between the installing costs, DTH suppliers offer the subscribers free access for all the available programme packages for the following 6 months (e.g. Digi TV offers max Package – HBO and Cinemax – until the end of 2005). There are other possibilities also for reducing the mentioned difference – RCS&RDS announced the subscribers about the possibility to lease the decode unit for the entire contract period. 12.3 The tariffs for TV programmes retransmission service through DTH technology are comparable with the tariffs for CATV programmes retransmission. 12.4 The number of subscribers for DTH service has increased; Focus Sat reached a number of (…) – July 2005, from a number of (…) subscribers in March 2005, 3 while Digi TV reached a number of (…) - July 2005 from a number of (…) subscribers in January 2005. 12.5 DTH digital technology will be a substitute for cable TV programmes retransmission; this will necessitate the reconsideration of the product’s relevant market as the TV programmes retransmission market, no matter what the used technology is. 13. By the Competition Council’s Plenum Decision no. 135/1998, the geographical relevant market for cable TV programmes retransmission services has been defined as national. 13.1 Two major operators will activate on the relevant market after the notified economic concentration will be put into practice. UGCE’s share market (in connection with the number of subscribers at 31.07.2005) will be of (…)%, while the main competitor RCS&RDS will have a market share of (…)%. This definition of the geographical relevant market (national) is sustained even in the case of a wider definition of product’s relevant market that includes CATV and other types of technologies used for TV programmes retransmission (e.g. DTH digital system). 13.2 (...). 13.3 (…). 13.4 The potential competition on this market is real and must be taken into account, having in mind that the infrastructure detained by undertakings is adequate to exploit in order to retransmit TV programmes. 14. In the case of internet access services market and fixed telephony services market, the geographical relevant market is defined as national. After the economic concentration operation will be realised, on the internet access services market, UGCE will have a market share of (…)%; the main competitors are RCS&RDS and Connex.
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