Telekom Slovenije May Settle Competition Suit With €50m Payment to Rival T-2

By , 13 Sep 2018, 11:59 AM Business
Telekom Slovenije May Settle Competition Suit With €50m Payment to Rival T-2 Logos from the firm's websites

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STA, 12 September 2018 - Telekom Slovenije, the state-owned telecoms incumbent, has agreed to pay EUR 50m to rival provider T-2 in a settlement of their long-running legal battle over abuse of dominant market position, several media have reported, citing unofficial sources. Telekom supervisors are to decide on the settlement on Thursday. 

The settlement comes after the Supreme Court last year found Telekom in breach of law through restriction of competition, ordering a retrial of the damages suit brought by T-2.

Neither party would comment on the news of what would be a record settlement in Slovenia. In a press release issued via the Ljubljana Stock Exchange, Telekom said it would "not comment on any speculations".

"We inform our shareholders and other interested parties of any such concluded activities regularly and promptly, and in accordance with the rules for companies with shares in the prime market, which means that we notify the public if and when an event occurs," Telekom said.

However, Telekom chairman Rudolf Skobe told the shareholders' meeting in May that the company would look into the options to resolve the dispute out of court.

Telekom Slovenije has created EUR 34.3m in provisions, which Skobe said was a suitable sum "considering the information we have".

The additional provisions, along with impairments on claims, were the main reason for the company's net profit being slashed by 77% to EUR 9.02m last year.

T-2 filed the EUR 130m lawsuit against Telekom in early 2007, arguing that Telekom Slovenije had used technical obstacles against T-2 when it marketed packages for internet access through VDSL technology.

Interest included, the claim is said to have increased to EUR 261m.

The suit was based on the Competition Protection Agency's finding that Telekom Slovenije abused its position in providing access to its network to alternative operators.

The case was first discussed by the Ljubljana District Court, which dismissed the damages lawsuit, arguing that T-2 failed to sufficiently prove the damage it had allegedly suffered.

In autumn 2016, the Ljubljana Higher Court rejected an appeal by T-2, but the Supreme Court ruled that both lower courts had failed to apply the relevant EU law and take position on other assumptions of the alleged liability of Telekom Slovenije.

In the period between 2012 and 2017 the telecoms group reduced the value of damages claims against its affiliates by EUR 473m to EUR 176.9m.

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