News from Cullen International's COVID-19 Update no. 8 (23 June 2020)]

New column on antitakeover-measures in the telecoms sector:

• Proposal in France to apply prior approval for foreign investment (outside EEA) if foreign investors would have > 10% of capital shares or voting rights (current threshold is 25%)
• Italy adopted decree, converted into law, extending Italian government’s special power (so called golden share) to block any foreign acquisition (EU “majority control/de facto control” or non-EU “investing at least €1m and acquiring at least 10% of the share capital or the voting rights)
• Proposal in Poland to introduce notification obligations to the Competition and Consumer Protection authority for acquisition by EU or non-EU investors of shares ≥20%
• Proposal in the Netherlands to require notification to the Ministry for acquisition by an EU or non-EU investors of controlling stakes (meaning >30% of voting rights)
• Proposal in the UK to introduce a notification system allowing businesses to flag to the government any transactions with potential security concerns for quick, efficient screening. The government would have powers to mitigate risks to national security (e.g. adding conditions to a transaction or blocking as a last resort)

Background

The quarantine measures taken as a result of the COVID-19 outbreak increased the use of telecommunications networks, highlighting their importance as growing online activities rely on these networks.

According to a BEREC report on the status of internet capacity, published on 30 March 2020,

"…the overall traffic on fixed and on mobile networks has increased during the COVID-19 crisis, but no major congestion issues have occurred. According to the information available, network operators have been able to cope well with this additional traffic load. Some local and temporary difficulties with the internet access have been observed and mitigated but has not been considered to be out of the ordinary”.

In addition, the European Commission and BEREC issued on 19 March 2020 a joint statement on how to cope with traffic management in exceptional circumstances.

Cullen International has researched the situation in 20 European countries with the following main findings:

• In Portugal and Spain, a law suspended fixed and mobile number portability where physical presence of a technician is required to avoid physical contact between telecoms employees and clients.
• Many authorities decided to take measures on spectrum assignment because of the emergency, ranging from delaying a spectrum auction (Austria) to suspending DTT migration plans (Portugal).
• Austria and Denmark required mobile operators to send COVID-19 warning messages by SMS.
• With the aim of keeping the whole population connected, some authorities requested flexibility on service payments, such as in Portugal, Romania and Spain.

Cullen International’s new benchmark summarises, on a best effort basis, the main regulatory initiatives for electronic communication services (ECS) in the European countries researched.

To access the full benchmark, please click on “Access the full content” - or on “Request Access”, in case you are not subscribed to our European Telecoms service.