1. Under the scope of the electronic communications market analysis process, ICP-ANACOM has already made notification for 16 of the 19 relevant markets defined as subject to sectoral regulation1.
ICP-ANACOM is presently analyzing the wholesale call access and origination in public telephone networks market (market 15)2 in order to determine the existence, or not, of effective competition and, should it be necessary, the regulatory obligations that must be applied to the operators identified as having significant market power.
2. Some elements were identified in the analysis that is being prepared. These point to the non existence of effective competition, which results namely from the operators not offering access services to their networks (including indirect access and access to virtual call card services) which might otherwise allow other entities to offer retail services. This market’s specific characteristics, its evolution over the past years and its oligopolist structure suggest that there is the possibility that operators have incentives for a coordinated, not competitive, behavior.
3. Indeed, since mid-2001, and unlike before, the three operators’ retail prices have remained relatively steady3, which is not consistent with the general decrease in costs4. An analysis made to the price evolution between January 2002 and March 2005, considering an average consumption profile consumer, points towards a prices stabilization to some extent and a synchronized evolution of the operators’ tariff plans.
4. The market has received since the end of June new lower end-price offers aimed at a market segment that focuses only on voice communications and short messages, which should be considered in the market analysis in course. The tariffs are comparatively simpler than the ones previously made available by the same operators and do not differentiate the price of calls inside their network (on-net) and to other networks (off-net).
The adoption of these strategies by the operators was made following ICP-ANACOM’s termination market intervention of February last5. In the document "Obligation of Price Control", published as a supplement to this market’s analysis6, ICP-ANACOM states that "the best way to deal with the market flaw associated with price discrimination consists of substantially reducing the mobile-mobile termination price, in order to improve the competition conditions for the mobile network operators (...). The proposed reduction, from the current 18.7 cents to 14 cents, being significant, not only contributes to improving the competition conditions between mobile operators, but also makes it easier to control practices that can harm competition."
Thus, by significantly reducing the mobile-mobile termination prices, as from March, and by implementing a gradual reduction that will reach 11 cents per minute in October 2006, which is closer to the real costs, the regulator created conditions for this type of tariffs, without on-net/off-net distinction, thereby creating increased chances for the development of new commercial strategies at the retail price level.
6. Portugal is one of the few European Union countries where the only retail mobile service providers are the network operators. In the majority of the remaining countries other companies exist who offer services in the retail market by accessing of the operators’ networks.
In this context, in line with the proportionality principle in which the new regulatory framework is based, ICP-ANACOM favors the establishment of agreements between the network operators and the service providers that result from an exclusively commercial negotiation, to the disadvantage of a regulatory intervention.
The whole market will in the medium run benefit, should such agreements lead to the creation of innovative offers and diversified services that bring added value to the consumers in general and the several market segments.
7. ICP-ANACOM intends to publish the Public Consultation on the market definition, evaluation of SMP (significant market power) and imposition of obligations in market 15 until the end of this year. In the analysis it will make, with the purpose of monitoring the existence or not of effective competition, competitive developments occurred up to that moment will be taken into account, namely the following items:
a) evolution of retail prices to consumer groups belonging to the several market segments;
b) existence of network access (including indirect access) agreements which allow the market entry of efficient service providers;
c) existence of innovative offers and diversified services that satisfy consumer needs.
1 See market analysis and notifications procedures calendar at /template2.jsp?categoryId=124219https://www.anacom.pt/render.jsp?categoryId=124219.
2 Consider the definition of market on the Preliminary Public Consultation – 3rd phase (see /template15.jsp?categoryId=108419https://www.anacom.pt/render.jsp?categoryId=108419).
3 In the years 2003 and 2004, all operators even proceeded, almost simultaneously, to retail price raises ranging between 2% and 3%.
4 See, for example, the CCPU (Cash Cost per User) values included in the operators’ financial reports.
5 See determination of 25/2/2005 at /template15.jsp?categoryId=152646https://www.anacom.pt/render.jsp?categoryId=152646.
6 See obligation of price control document available at: /template15.jsp?categoryId=152646https://www.anacom.pt/render.jsp?categoryId=152646.
