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Following a number of applications from mobile operators requesting an assessment of the current situation in the public procurement of electronic communications services, the Competition Council of Latvia (the CC) has assessed the situation within its remit, identifying actions that should be taken into account by contracting authorities in order to prevent anti-competitive practices in procurement.

The CC explains that there are several possible criteria for assessing the quality and availability of a mobile communications service, but that each of them is incomplete in its own way. Therefore, it is not justified to give decisive weight to one single quality assessment criterion. Especially if it gives a market player a clear advantage over other competitors.

Giving decisive weight to such criteria as the number of base stations and the number of base stations in a given frequency range, the number of sales points, as well as to certain criteria in the financial section creates a risk of a breach of competitive neutrality.

The CC does not recommend including criteria on the number of base stations or the number of base stations in a given frequency range, as these criteria are clearly not capable of ensuring the best quality of service. Regarding the criteria on the number of sales points, the CC is concerned about the practicality of this. In particular, existing practice shows that the requirement to maintain customer service centres does not apply for the entire duration of the agreement, but only for the time when the tender is submitted, and therefore becomes irrelevant after the conclusion of the procurement agreement.

Regarding the financial criteria, the CC calls for the possibility to assign evaluation points for the whole package of services rather than for individual service items in the tender specifications, given that charging per service item – per minute of talk, per text message, per megabyte of internet – is no longer applied in practice. Therefore, there is no competition for these items, as all applicants receive the same highest score.

When drafting the regulations and technical specifications for electronic communications procurement, the CC suggests taking into account the Public Procurement Guidelines for Mobile and Fixed Communications Procurement developed by the Ministry of Transport and published on the website of the Procurement Monitoring Bureau. They explain the basic principles for determining the procurement requirements for procuring authorities and promote a common understanding of the assessment of the availability of mobile and fixed network services on the basis of coverage maps submitted by the applicants, the actual monitoring of service provision during the performance of the agreement, and the quality of mobile service on the basis of information published on the website of the Public Utilities Commission.

At the same time, the CC invites public entities to create variation in the quality criteria to be included in the tender regulations, thus promoting competition in electronic communications procurement, ensuring efficient use of public funds, and avoiding the risk of violating competitive neutrality.

When operating in the market, a public entity has a special responsibility to comply with competitive neutrality in order to avoid distorting competition in the public interest. The CC draws attention to the fact that behaviour contrary to the principle of competitive neutrality may in the long term lead to the exclusion of private players from the market, delay innovation by restricting the development of existing companies, and impede the entry of new companies into the market.