Summary

Facts

LD Telecom and Multiphone are long-distance carriers that offer long-distance calls by prepaid cards. With these calling cards customers must use the non-geographic numbers (0800 (collect number) and 0500 (origination with local call cost to the customer)) to access the network of the desired long distance carrier.

In July 2005 CANTV introduced a long-distance prepaid card called “Bajo Control”. The tariff of this calling card was below the costs of LD Telecom and did not charge for access to the 0800 number.

LD Telecom pointed out that, as a consequence, in September its sales fell by 20%. Multiphone said that its main card wholesaler did not purchase cards for two consecutive months after the CANTV prepaid card was introduced.

Decision

The antitrust authority found no evidence of a decrease in LD Telecom sales. Furthermore, there was not enough proof that CANTV had practised predatory pricing.

Reasoning

The antitrust authority defined the relevant market as the international long-distance service offered through access for prepaid cards for the entire national territory to non-geographic 0800 numbers. From the analysis of effective competition in the relevant market, the authority concluded that CANTV had dominant position.

The existing market structure and company characteristics of CANTV created a scenario where a predatory practice by CANTV was a real possibility. Nonetheless, the cost analysis did not provide any evidence that the price was below cost in the period of study.