ANCOM submits for public consultation three draft decisions reviewing the retail markets for access and calls services provided at a fixed location and the wholesale markets for services of call origination at fixed locations and transit on the public telephone networks. Romtelecom remains a significant market power provider on both wholesale markets, as well as on the retail market for access provided at fixed locations.
The above mentioned markets have been reviewed in order to re-assess the competitive conditions and to re-evaluate the regulatory measures in force, given the developments in the Romanian electronic communications sector in the period 2004 – 2008.
Hence, in the retail access market, the Authority deems that Romtelecom’s obligations regarding the carrier selection and pre-selection (the obligation of offering its subscribers the possibility to use the services of any provider of publicly available telephone services with which it is interconnected) and the obligation which prohibits binding the purchase of a service to the purchase of another service (the obligation of not conditioning the provision of access to a fixed location by the end-users’ acceptance of additional services, unrelated to the requested one) should be upheld.
In the calls markets, ANCOM intends to withdraw all the obligations previously imposed on Romtelecom, following both direct and indirect (from other retail telephony markets) competitive pressures exerted in particular by the cable operators and by the mobile network operators, which triggered a significant decrease of the incumbent’s market shares, even below 40%.
Moreover, in establishing its preliminary conclusions, the Authority took into consideration the fact that, both for the access and call services, the tariffs charged by Romtelecom are, on average, below the ceiling allowed by the price cap formula established following the market reviews conducted in 2004.
“This step was determined by the enhanced competition in the Romanian market for telephone services provided at fixed locations, mainly following its evolution in the period 2007-2008. Thus, ANCOM considers that, within the timeframe of the market review, the ex ante obligations maintained in the access market and in the wholesale markets are sufficient to ensure effective competition in the retail fixed telephony markets,” the ANCOM President, Mr. Catalin Marinescu, declared.
As regards the wholesale markets for call origination at fixed locations and call transit on the public telephone networks, following the market analyses, the Authority’s preliminary opinion is that Romtelecom still has significant market power. The main criteria grounding this conclusion are this operator’s market share of over 50% in both markets, the existence of high barriers to market entry and to switching providers, the lack of potential competitors, as well as its control over a network and associated facilities that are difficult to replicate.
Therefore, ANCOM proposes to maintain all the obligations previously imposed on Romtelecom – the obligation to allow access to and the use of specific infrastructure elements and of the associated facilities in terms of providing call origination and interconnection for the purpose of switched transit services, the obligation of transparency, the obligation of non-discrimination and the price control obligation, including cost-orientation.
Starting from 2007, the Authority has begun the 2nd round of market reviews in the electronic communications sector, a process which includes reviewing the definitions of the current relevant markets or defining new relevant markets, assessing the competitive conditions in these markets for the purpose of identifying any potential significant market power providers as well as revisiting the regulatory obligations in force, i.e. upholding, withdrawing or amending these obligations, or imposing new ones.
Upon closing the public consultation and analysing the comments and suggestions received, according to the provisions of the European regulatory framework in the field, applicable following Romania’s accession to the European Union, ANCOM will notify the European Commission and the national regulators in the other EU member states on the proposed set of regulations, which includes the definitions of the identified relevant markets, the designation of providers with significant market power, as well as the obligations envisaged for the revised markets, alongside the reasons grounding these measures. The European Commission and the other regulatory authorities will be invited to send their comments and suggestions within one month from the notification date.
The draft decisions are available on the ANCOM website. The interested entities may submit their comments and suggestions, by 28 August 2009, at the ANCOM headquarters (2 Delea Noua Street, sector 3, Bucharest), directly to the Registry or by means of the Authority’s regional departments. Comments are invited also by fax to +40 372 845 402 or by e-mail to consultare@ancom.org.ro.