Ancom - 2 noiembrie 2011

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ANCOM Envisages a Further Decrease of the Fixed and Mobile Termination Rates

02.11.2011

Yesterday, 1 November 2011, during a Consultative Council meeting, ANCOM concluded the national debate on the set of measures meant to identify, analyse and regulate the markets for services of call termination on the public telephone networks provided at a fixed and, respectively, at a mobile location, which will result in the decrease of the termination rates charged by all the fixed and mobile telephony operators active on the Romanian market.

Following the recommendations and comments received during the national public consultation period, ANCOM envisages a more accentuated decrease of the maximum mobile termination rates than the one submitted to public consultation, and extended the reduction timeline from 6 months to 8 months.

Thus, from 1 January 2012, the maximum rate for call termination services provided on the mobile telephone networks will be 4.05 eurocents per minute. Moreover, as of 1 September 2012, the mobile call termination rates will further decrease to 3.07 eurocents/minute.

Considering that the six mobile operators identified as having significant market power – Cosmote, Orange, RCS&RDS, Romtelecom, Telemobil and Vodafone – are currently charging different tariffs for the call termination services, the decreases in the first phase range between 19% and 30%, so as to reach symmetrical levels for all operators, followed by a second phase of reduction by 24% of all operators’ tariffs, starting 1 September 2012.

The other remedies proposed for both markets, i.e. fixed call termination and mobile call termination, remain unchanged: the obligation of transparency, the obligation of allowing access to, and use of, certain specific network elements and of the associated infrastructure, the obligation of non-discrimination and the obligation of price control (including the obligation to maintain the symmetry of the termination rates).

The maximum interconnection tariffs in view of call termination charged by the 52 fixed telephony operators identified as having significant market power will initially decrease by15%, from 0.97 eurocents/minute to 0.82 eurocents/minute as of 1 January 2012, and by another 18%, down to 0.67 eurocents/minute as of 1 July 2012. Thus, by mid-2012, there will be a decrease by approx. 31% of the current fixed call termination rates. The rates will no longer be differentiated by times of day.

The rates proposed today by ANCOM have been benchmarked against termination rates in other European countries, set based on the avoidable long-run incremental costs (LRIC), associated to the provision of termination services. The development of similar models for modelling the costs of Romanian operators has already been begun by ANCOM and most probably is to be completed by the end of 2012, when ANCOM will be able to impose new cuts of the termination rates.

“The proposed measures are the result of the third round of telephony market analysis, a periodical process that the Authority is undertaking, in accordance with the national and European legislation, to ensure the functioning of the telephone markets in a competitive environment and protect the end-users’ interests. More specifically, the ANCOM measures are aimed at creating equal conditions for all market players, irrespective of the network size, of the customer base or of the market entry moment, so as to enable the end-users to enjoy quality services at competitive prices,” Mr. Catalin Marinescu, the president of ANCOM, said.

According to the rules of the European regulatory framework in the field, applicable from the moment Romania became an EU Member State, ANCOM is to notify the set of proposed measures to the European Commission, the Body of European Regulators for Electronic Communications (BEREC) and the national regulatory authorities in the other EU Member States. These may send ANCOM their comments and suggestions within one month from the notification date.

According to the data reported by the providers, the electronic communications market was worth EUR 3.6 billion (RON 15.3 billion) in 2010, down by 6.6% as compared to 2009.