The European Commission has urged the Latvian telecoms regulator Sabiedrisko Pakalpojumu Regulesanas Komisija (SPRK) to set lower fixed and mobile termination rates.
The regulator is criticised for not using the right method for calculating the…
The European Commission has urged the Latvian telecoms regulator Sabiedrisko Pakalpojumu Regulesanas Komisija (SPRK) to set lower fixed and mobile termination rates.
The regulator is criticised for not using the right method for calculating the termination rates. In 2009, the Commission made termination rate calculation recommendations but allowed regulators to use their own method for a transitional period provided these methods were based on objective criteria and ensured that terminations rates reflect the costs that an efficient operator incurs. The Commission has also said that access and price control obligations should be imposed on all operators with significant market power to avoid potential competition problems.
In the report it submitted to the Commission, SPRK considered that all four mobile network operators (Tele2, LMT, BITE Latvija and Telekom Baltija) had significant market power. It also decided to control termination rates for the three largest mobile operators (Tele2, LMT and BITE) and fixed line incumbent Lattelecom from April 2010 to January 2012.
However, the Commission thinks that SPRK has not sufficiently explained why it has selected these methods, particularly those based on estimations for setting regulated termination rates.
The Commission recommended that SPRK imposes an obligation on all operators to provide access to their networks for other operators and regulates termination rates of all market players, including smaller ones.
EU Telecoms Commissioner Vivian Reding said: “I understand that some smaller telecoms regulators may find it challenging to implement the Commission’s recommended way of calculating termination rates. I am glad that SPRK intends to build, despite these difficulties, such a model by 2013.”
She added: “In the meantime SPRK should ensure that Latvian termination rates are moving towards efficient costs, by carefully selecting the methodology and criteria when regulating tariffs. Latvian customers should not pay more than necessary until this happens.”
Termination Rates are the wholesale prices which telecoms operators charge each other for connecting incoming calls to subscribers using their networks and are ultimately included in phone call prices.
