David Burnstein's List: Interconnection

France’s telecoms regulator Arcep has announced that it will cut the length of time that new mobile operator Iliad is allowed to charge higher termination rates than its rivals. Reuters reports that charges for calls into Iliad’s network will stay higher than those for its rivals only until mid-2013, six months earlier than the previous target of end-2013. In addition, from next month Iliad and other new entrants will charge EUR0.016 (USD0.02) per minute for calls originating from established operators’ networks, down from the previously proposed rate of EUR0.024. Existing operators Orange, SFR and Bouygues Telecom will charge EUR0.01. From July 2013 all operators will charge EUR0.008 per minute.

The European Commission (EC) has said that it has ‘serious doubts’ regarding a revised proposal from Latvian telecoms regulator the Public Utilities Commission (Sabiedrisko Pakalpojumu Regulesanas Komisija, or SPRK) related to fixed line termination rates. According to a press release issued by the EC on the matter, it has claimed that the SPRK’s proposals would ‘negatively affect consumers in Latvia’, noting that the watchdog has put forward what it terms ‘very high’ fixed termination rates of EUR0.29 (USD0.35) per call and EUR0.26 per minute from 1 April 2013. Comparing these proposed rates to those in other European Union member states, the EC says that the proposals are ‘not in line with the Commission’s 2009 Termination Rates Recommendation under the EU telecoms rules’. Further, the European watchdog noted: ‘The methodology applied by [the] SPRK on fixed termination rates does not ensure that these rates are set on the basis of the costs of an efficient operator and therefore they result in rates which are too high by EU standards.’

EE, the UK’s largest mobile network operator by subscribers, has failed in its effort to overturn a regulatory decision related to the reduction of mobile termination rates MTRs), Bloomberg reports.
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As noted in TeleGeography’s GlobalComms Database, in May 2011 EE called on the CAT to request that Ofcom reduce the proposed cuts. The decision proved costly however, with the CAT in February 2012 not only confirming that the reductions would stand, but going one step further by calling for marginally steeper drops
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Under the revised reduction plan set out by the CAT, by April 2014 the termination rate for all of the country’s network operators will fall to GBP0.0065 (USD0.0098)

The European Commission (EC) has blocked a proposal by the Federal Network Agency (FNA) under which Germany’s telecoms regulator hoped to set fixed termination rates three times higher than the average of countries which follow the recommended approach set out in EU telecoms rules. Under the FNA’s proposal, fixed termination rates would range from EUR0.0036/minute (peak) to EUR0.0025/minute (off-peak), whereas operators in countries which follow the EC’s recommended approach pay on average EUR0.001/minute. EC Vice President Neelie Kroes stated: ‘My job is to deliver a Single Market for telecoms for all EU citizens. All EU countries – big and small – have signed up to, and are implementing, the rules which put this in place. No country can be allowed to divert us from this goal. I urge [the FNA] to bring forward a new proposal that delivers lower consumer prices and helps us build a telecoms Single Market.’ The FNA now has three months to wok with the Commission and the body of European telecoms regulators (BEREC) on a solution. In the meantime, implementation of the proposal is suspended.

Thailand's three private mobile operators and the regulator have agreed on an interconnection fee of THB 0.45 per minute. Advanced Info Service (AIS), DTAC and True currently work with an interconnection fee of THB 1 per minute but will soon sign an agreement to adopt the new, lower rate, The Nation writes. The rate will also apply to the operators' subsidiaries that operate 3G services, which already use the new interconnection rate. The National Broadcasting and Telecommunications Commission (NBTC) asked the three operators to negotiate a new agreement on one interconnection rate for all mobile services, rather than using the different rates. The companies agreed to do so while state-owned operators TOT and CAT Telecom have said they need more time to consider this. CAT and the private operators charge each other THB 0.50 per minute in interconnection fees.

According to the EC, the termination rates proposed by Germany are three times higher than the average of countries which follow the recommended approach set out in European Union (EU) telecom rules. Under the FNA’s proposal, the FTRs that German alternative operators would be allowed to charge range from EUR0.0036 (USD0.0047) per minute (peak) to EUR0.0025 per minute (off-peak), which correspond to the FTRs that the FNA proposed for incumbent Deutsche Telekom (DT) earlier this year. DT’s termination rates were also suspended by the EC in March, as they did not reflect the price of the provision of an efficient termination service; the FNA, the Body of European Regulators for Electronic Communications (BEREC) and the EC are currently discussing the way forward with respect to FTRs for DT. European Commission vice president Neelie Kroes stated: ‘It is important for building up a real single market that both operators and consumers face termination rates in Germany that are in line with those in other EU Member States.’

Sweden’s Post and Telecom Agency (PTS) has set a new, lower wholesale mobile voice call termination rate (MTR) of SEK0.09 (USD0.013) per minute, valid from 1 July 2013, based on a revised cost-oriented price calculation model. The new price recommendation represents a 40% decrease from the existing MTR of SEK0.15, and applies to TeliaSonera, Tele2, Telenor, Hi3G Access (3), Lycamobile, TDC, Mundio, Gotaland and Net 1.

he ACM used the Pure Bulric method, recommended by the European Commission, in its decision, while the rates imposed by the court injunction are based on Bulric Plus.
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While the ACM argued that the use of Bulric Plus could distort the internal market in the EU, the court noted that not all EU countries have moved to Pure Bulric and some, such as Germany, are also using Bulric Plus.

In a first reaction, the ACM called the decision bad for consumers and businesses, who pay the bills in the end.

Icelandic telecoms regulator the Post and Telecommunication Administration (PTA) has published its Decision 25/2013, which will dictate the wholesale mobile termination rates (MTRs) for all of the country’s wireless operators from January 2014, via a benchmarking approach.

South African telecoms watchdog, the Independent Communications Authority of South Africa (ICASA), has adopted Long-Run Incremental Cost Plus (LRIC+) methodology for bottom-up and top-down cost-oriented mobile and fixed wholesale voice call termination rates. The authority has disclosed that the introduction of the LRIC+ model will allow operators to recover a portion of the joint and common costs incurred in the provision of wholesale voice call termination service through the termination rates themselves, which will in turn ensure continued investment in the country’s telecoms networks. Further, the LRIC+ methodology will correct imbalances created by call termination regulations adopted in 2010, under which different cost standards applied to different markets.

As previously reported by CommsUpdate, on 29 September 2014 the CITC published its ‘Regulation of Wholesale Local Voice Call Termination Rates on Mobile Networks (MTR)’ for public consultation, following a benchmark analysis with several countries at regional and international level. The regulator highlighted that as the wholesale price of SAR0.25 for local voice call termination in Saudi Arabia was well above the world’s average of SAR0.08, it had decided to start regulating MTRs in order to promote competition, protect the interest of end-users and encourage the provision of reliable telecoms services.

As previously reported by CommsUpdate, in March 2015 announced it would examine the FICORA’s proposal to allow Finnish mobile network operators to recover MTR costs other than those strictly related to the incremental costs of provision of wholesale termination services. At the time, the FICORA argued that its regulatory proposition promoted competition, while noting that the Information Society Code, which is in force in Finland, did not enable the use of the cost calculation model recommended by the EC. As per its proposition, the Finnish regulator had suggested that MTRs should not exceed EUR0.0125 (USD0.0135) per minute, effectively meaning a 33% reduction from the current level.