BRUSSELS (Reuters) - The European Commission said on Tuesday it is to investigate whether a mobile telecoms network-sharing deal between O2 CZ/CETIN and T-Mobile CZ restricts competition in the Czech Republic.
The cooperation between the two companies, which serve about three-quarters of the Czech market, started in 2011 and had since been increased in scope to include 3G and 4G data services and covers all of the country with the exception of Prague and Brno.
The Commission said it would investigate whether the deal slows down quality improvements in existing infrastructure or delays the deployment of new technologies as well as new services based on them.
The country's only other mobile network operator is Vodafone, the smaller of the three, which is not party to the network-sharing agreement.
O2 CZ/CETIN and Deutsche Telekom unit T-Mobile CZ may have to end their arrangement or modify it if found to be in breach of EU competition rules.
CETIN is a telecommunications infrastructure firm that was spun off from O2 Czech Republic last year. Its owner is Czech businessman Petr Kellner's investment group PPF, which also owns over 84 percent of the shares in O2 Czech Republic. No one at CETIN could immediately be reached for comment.
T-Mobile CZ said the network-sharing deal was positive for customers.
"We are closely cooperating with the European Commission in the given matter," a spokeswoman said.
"We are convinced that cooperation in the area of network sharing does not curb competition nor innovations. On the contrary it brings benefits to end-customers."
(Reporting by Foo Yun Chee; Additional reporting by Jan Lopatka in Prague; Editing by Robert-Jan Bartunek, Greg Mahlich)