Lower Tariffs for Interconnection with Mobifon and Orange Romania

“According to the results of the cost calculation model established by ANRC, the tariffs for the interconnection with the networks of Mobifon and Orange Romania must be diminished by 14.8% each year until 2009, in order to reach a level that reflects the costs,” Dan Georgescu, ANRC president, declared during the workshop organized today by Ziarul Financiar.

The suggested new tariffs have been published yesterday on the ANRC website, for public consultation purposes. A transition period of three and a half years will have passed before the these tariffs are fully cost-oriented. ANRC suggests the tariffs to be reduced along 4 steps: 1st of July 2006, 1st of January 2007, 1st of January 2008 and 1st of January 2009.

By means of interconnection, operators gain access to other operators’ communications infrastructure, the possibility for end-users to call subscribers of other networks being thus possible. Charging cost-oriented interconnection tariffs allows all other operators to compete under the same conditions as the operators with significant market power.

„Market analyses have revealed that Mobifon and Orange Romania are in control of 13 million users, which confers enormous market power upon them. Any of these operators may thus impose, through its interconnection tariffs, a charge which is not justified from an economic point of view, in no connection with the real costs and which is to be found in the tariffs paid by the subscribers of the other fixed or mobile operators. This can only discourage the users and unfairly diminish the other operators’ premises for success”, the ANRC president, Mr. Dan Georgescu declared.

In order to establish the amount of the interconnection tariffs, ANRC developed a technical-economic model which takes into account the costs of installing, operating and maintaining an efficient mobile public telephone network, supported by Ovum Europe Ltd, a consultancy company in the United Kingdom.

Orange and Mobifon did not observe the legal obligation of making available for ANRC their own costing models in view of comparing and reconciling them with the model elaborated by ANRC. Under these circumstances, ANRC decided to use exclusively its own model, while agreeing to participate in an extended bilateral consultation, during which the two operators had the opportunity to reasonably request model adjustment. The volume of data made available by the two operators during the bilateral consultation was reduced, bearing a relatively limited impact on the model results. Therefore, ANRC decided to launch public consultation, during which both the two operators and all the interested parties may send comments on the model and on ANRC’s draft decision.

The public version of the technical-economic model based on which the new interconnection tariffs were identified is available on the ANRC website. Although it does not include confidential information on the operators’ activity, this version is detailed enough to allow the proper understanding of the structure and functioning of the bottom-up model, by using the documents and the user’s guide accompanying this model.

The draft decisions of the President of the National Regulatory Authority for Communications on establishing the tariffs for the interconnection services provided by S.C. „Mobifon” – S.A. and S.C. „Orange Romania” – S.A. on the markets of access to their own mobile telephone networks for the purpose of call termination, based on a LRIC model, are available on the ANRC website. All the interested persons are invited to send their comments and suggestions by May 4, 2006. Comments and suggestions may be submitted by mail to the ANRC headquarters (14 Libertatii Blvd., 5th District, Bucharest) or directly to the ANRC registration office or to the closest territorial office of ANRC. Comments may be sent also by fax to +40 21 307 54 02 or by e-mail to consultare@anrc.ro.