ANCOM has debated and agreed with the electronic communications industry to reduce mobile termination rates by 12.5%, ​​from 0.96 eurocents/minute to 0.84 eurocents/minute starting 1 May 2018. This is a transitory measure, up to the completion of a new cost model. "This reduction in termination rates will motivate operators to be as cost-effective as possible, which fosters competition and is to be reflected in the prices paid by users for mobile calls.", said Sorin Grindeanu, ANCOM president.

Pricing methodology

This year, ANCOM will start developing a new cost model, meant to reflect the efficient costs of providing mobile termination services and to generate a new ceiling for mobile termination rates.

Until the completion of the new cost model, ANCOM deems an adequate solution to adopt the transitory tariff agreed today. This is the average of the tariffs for the provision of these services in the Member States of the European Union that used a pure LRIC bottom-up model. Moreover, this type of cost model is the instrument recommended by the European Commission in regulating fixed and mobile call termination rates.

The solution chosen by ANCOM has the advantage that it can be implemented faster than a possible update of the existing cost model, being an appropriate temporary measure until the setup of the rates resulting from a new pure LRIC cost model that includes the 4G /LTE technology.

Timeframe of applying transitory rates 

The transitory mobile termination rate will not exceed 0.84 eurocents/minute, from 1 May 2018 to the date of completing the new cost model.

Considering the complexity of such a modelling exercise and its experience in developing elaborate technical and economic models, the Authority estimates that the completion of the new cost model will take approximately 16 months from the process initiation.

The future cost model will take into account the expanding of 4G/LTE network coverage over the past years and the considerable data volume increase, which are likely to lead to a reduction in the efficient costs of providing call termination services at mobile locations.

Fixed call termination rates

By the end of this year, ANCOM will also review the pure LRIC model for determining the costs of fixed call termination services and will set new ceilings, based on the current costing model, which does not require substantial alterations, as it has already taken into account next generation networks.

The consultation procedure

According to the European regulatory framework in the field, ANCOM is to notify the European Commission, the Body of European Regulators for Electronic Communications (BEREC) and the other national regulatory authorities in the European Union member states on the proposed measures. The European Commission, BEREC and the other regulatory authorities will be able to send their comments and suggestions to ANCOM throughout one month since the notification date.

What are termination rates?

A termination rate consists of the price paid by a telephony provider to the operator on whose network a call initiated by the former’s user is terminated. The tariff charged on the end-user initiating the call includes this price.