Belgacom mobile unit hit by 66 mln euro fine

BRUSSELS, May 26 (Reuters) - Belgium's competition authority imposed a 66.3 million euro ($92.6 million) fine on Belgacom's (BCOM.BR) mobile phone arm Proximus on Tuesday for abusing its dominant position.

The fine, the heaviest ever handed down by the Belgian Competition Council, covered Proximus's bid in 2004 and 2005 unfairly to exclude rivals, the council said in a statement.

The fine follows a complaint in 2005 by rival Base, owned by Dutch KPN (KPN.AS), which alleged Proximus took action to exclude rivals, in particular for business customers.

The competition council said that Proximus had a dominant position from 2002 to 2005 and its position was reinforced by factors such as its use of shops of mother company Belgacom.

It found that in 2004 and in 2005 the prices charged by Proximus to end-users were lower than the wholesale prices charged to competitors to use the Proximus network, known as mobile termination rates.

The council determined that this "margin-squeeze" constituted an abuse of a dominant position, infringing Belgian and European competition rules.

"Competitors were unable to propose prices to their clients for communications towards the Proximus network that were more interesting or even similar to the prices that Proximus could offer to its clients," the council said.

It said the fine was based on the nature and economic impact of the infringement, Proximus's market share and the fact that liberalization was a priority in the telecoms sector.

Mobile operators in Europe have faced a series of caps on mobile termination rates and roaming charges in recent years.

Belgacom, the former state telecoms monopoly, said it was aware of the decision, would analyze it and decide in the coming days whether there were grounds for an appeal.

The company made a net profit of 800 million euros in 2008. ($1=.7158 Euro) (Reporting by Philip Blenkinsop, editing by Gerald E. McCormick)