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Lower Interconnection Rates for Telephone Services, Enhanced Competition to the End-Users’ Benefit

12.12.2013
 
The Romanian National Authority for Management and Regulation in Communications (ANCOM) has finalised the last round of national debates on the new maximum rates for the interconnection services in view of fixed and mobile call termination. Following the comments received during the public consultation on the proposed measures, the maximum termination rates will be 0.14 eurocents/minute for fixed call termination – down from 0.67 eurocents/minute – and 0.96 eurocents/minute – down from 3.07 eurocents/minute for mobile call termination. The measure will also be consulted at European level.
ANCOM also set new tariff ceilings for the ancillary interconnection services offered by all the providers of communications networks, respectively for the national call transit services, leased lines-terminating segments services and Ethernet backhaul services, supplied by Romtelecom.
The rates were determined by ANCOM based on certain cost calculation models and will become effective as soon as the mandatory European consultation stage is finalised. In order to obtain the correct values of the termination rates, ANCOM calculated the efficient costs of the service provision, using working hypotheses in line with the Romanian legislation, the information submitted by the network providers, as well as the best modelling practices at the European Union level.
The lowering of the termination rates is necessary in order to incentivize competition in the telephony market. Although the smartphone penetration rate in Romania is comparable to the one in France or Germany, more than 70% of the Romanian users limit their national mobile calls because they are preoccupied with the too high communication costs. The on-net calls hold almost 90% share within the total traffic of mobile calls.
“The barriers between networks, in particular the high termination rates, discourage the communication between the users of different networks. The new termination rates proposed by ANCOM realistically reflect the consumption of resources necessary for the provision of services and will ensure a healthy development of competition, to the end-users’ benefit”, the president of ANCOM, Mr. Catalin Marinescu, said. 
The new rates will become mandatory for all the network providers from Romania identified as having significant power on the markets of fixed and mobile call termination. As until now, the termination rates are not differentiated by the technology used (e.g. 2G or 3G, PSTN or IP), by the time of the day when the calls are initiated or by their origin (fixed locations, mobile locations, national or international networks).
The termination rate is exclusively billed in the case of the off-net calls and is the cost requested by the terminating network for accepting the call. Since this price is included in the tariff charged to the originating end-user, the charging of excessive termination rates in proportion to the costs of efficient provision of the services may negatively affect the retail competition and distorts the users’ consumption behaviour.
ANCOM is to notify the set of proposed measures, alongside the reasons grounding these measures, to the European Commission and national regulatory authorities from the other Member States of the European Union, who may send ANCOM their comments and suggestions within one month from the notification date. ANCOM will take utmost account of these comments and suggestions.

Lower Interconnection Rates for Telephone Services, Enhanced Competition to the End-Users’ Benefit

12.12.2013
 
The Romanian National Authority for Management and Regulation in Communications (ANCOM) has finalised the last round of national debates on the new maximum rates for the interconnection services in view of fixed and mobile call termination. Following the comments received during the public consultation on the proposed measures, the maximum termination rates will be 0.14 eurocents/minute for fixed call termination – down from 0.67 eurocents/minute – and 0.96 eurocents/minute – down from 3.07 eurocents/minute for mobile call termination. The measure will also be consulted at European level.
ANCOM also set new tariff ceilings for the ancillary interconnection services offered by all the providers of communications networks, respectively for the national call transit services, leased lines-terminating segments services and Ethernet backhaul services, supplied by Romtelecom.
The rates were determined by ANCOM based on certain cost calculation models and will become effective as soon as the mandatory European consultation stage is finalised. In order to obtain the correct values of the termination rates, ANCOM calculated the efficient costs of the service provision, using working hypotheses in line with the Romanian legislation, the information submitted by the network providers, as well as the best modelling practices at the European Union level.
The lowering of the termination rates is necessary in order to incentivize competition in the telephony market. Although the smartphone penetration rate in Romania is comparable to the one in France or Germany, more than 70% of the Romanian users limit their national mobile calls because they are preoccupied with the too high communication costs. The on-net calls hold almost 90% share within the total traffic of mobile calls.
“The barriers between networks, in particular the high termination rates, discourage the communication between the users of different networks. The new termination rates proposed by ANCOM realistically reflect the consumption of resources necessary for the provision of services and will ensure a healthy development of competition, to the end-users’ benefit”, the president of ANCOM, Mr. Catalin Marinescu, said. 
The new rates will become mandatory for all the network providers from Romania identified as having significant power on the markets of fixed and mobile call termination. As until now, the termination rates are not differentiated by the technology used (e.g. 2G or 3G, PSTN or IP), by the time of the day when the calls are initiated or by their origin (fixed locations, mobile locations, national or international networks).
The termination rate is exclusively billed in the case of the off-net calls and is the cost requested by the terminating network for accepting the call. Since this price is included in the tariff charged to the originating end-user, the charging of excessive termination rates in proportion to the costs of efficient provision of the services may negatively affect the retail competition and distorts the users’ consumption behaviour.
ANCOM is to notify the set of proposed measures, alongside the reasons grounding these measures, to the European Commission and national regulatory authorities from the other Member States of the European Union, who may send ANCOM their comments and suggestions within one month from the notification date. ANCOM will take utmost account of these comments and suggestions.
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