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The BIPT examined whether the operators with a significant market power (Proximus, Telenet, Brutélé and Voo NV) use rates that may result in a margin squeeze. We talk of margin squeeze or price squeeze when the margin between all relevant revenues and the wholesale costs is no longer sufficient to cover the proper network and retail costs , including a reasonable return on capital. In the case of a margin squeeze, an alternative operator would not be capable of duplicating the retail prices of operators with a significant market power (hereinafter “SMP operators”), considering the price due for the use of the SMP operator’s network.

Margin squeezes can severely distort competition and prejudice consumers by preventing new entries and growth of competitors or even expulsing alternative operators from the market. The current stipulations applicable have been included in guidelines published by the BIPT on 26 December 2017. The ban on using margin squeeze practices by SMP operators has been included as an obligation in the CRC Decision of 29 June 2018 regarding the analysis of the broadband and television broadcasting markets and the BIPT Decision of 13 December 2019 regarding the high-quality access market.

The Council thought it desirable to submit the relevant retail services to another test in 2020 in light of modifications that have since then taken place at a regulatory level (in the current test, for instance, the most recent rates for access to the cable networks and Proximus’s FTTH network have been taken into account) and the evolution of the operators’ commercial offer characterised by more complex bundle types. 

The BIPT has found no margin squeezes practices on the portfolio level, nor on the basis of the recent tests, neither on the basis of the SMP operators’ own costs or the modifications to the SMP operators’ scale and efficiency.

The insights gained from conducting these tests have pushed the BIPT to adapt certain stipulations of its guidelines. The modifications include the adoption of a number of clarifications relating to the conducting of a test on product level (principle 3) as well as the procedure for the adaptation of the margin squeeze test and more in particular the test frequency (principle 15). These renewed guidelines replace the Communication of 26 December 2017 regarding the guidelines implementing margin squeeze tests.
 

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