Countries which have adopted best practices

The Recommendation on Terminations states that:

''In exceptional circumstances where an NRA is not in a position, in particular due to limited resources, to finalise the recommended cost model in a timely manner and where it is able to demonstrate that a methodology other than a bottom-up LRIC model based on current costs results in outcomes consistent with this Recommendation and generates efficient outcomes consistent with those in a competitive market, it could consider setting interim prices based on an alternative approach until 1 July 2014. Where it would be objectively disproportionate for those NRAs with limited resources to apply the recommended cost methodology after this date, such NRAs may continue to apply an alternative methodology up to the date for review of this Recommendation, unless the body established for cooperation among NRAs and the Commission, including its related working groups, provides sufficient practical support and guidance to overcome this limitation of resources and, in particular, the cost of implementing the recommended methodology. Any such outcome resulting from alternative methodologies should not exceed the average of the termination rates set by NRAs implementing the recommended cost methodology.''

Even while the situation alluded to in the text above may not be fully applicable to the current case, given that the timeframe envisaged by the Commission for the development of cost models has not yet elapsed, in the absence of precise knowledge about the countries that have already finalized and implemented a new cost methodology, it is appropriate to consider, as a proxy for the establishment of termination rates, a relevant sample of countries that have recently announced these prices to apply in their markets.

In this context, at the press conference that marked the publication of the Recommendation on Terminations, Commissioner Viviane Reding said:

''… despite efforts made by some national telecoms regulators to bring down mobile termination rates so as to reflect the real costs incurred by the operators - I mean by this in particular the Swedish, Finnish, French, Italian, Austrian and Romanian regulator who have started to go in the right direction as regards mobile termination rates -, we still face a situation with rates varying considerably from Member State to Member State''.¹

The Commission looked favourably on the decisions taken by these countries, which represent a commitment to align the regulation of termination prices with European legislation and best practice at European level, as well as a firm intention to develop a model in accordance with the Recommendation on Terminations ². It appears therefore, according to the Commission, that these six countries (Sweden, Finland, France, Italy, Austria and Romania) are on the right track when it comes to the regulation of termination rates. As such, it becomes particularly important to analyze the pricing decisions that these countries have already decided to apply in the near future.

In this context, note is made of the following decisions or intentions which have already been declared by the six NRAs of these countries with respect to intervention on mobile termination rates, with application during the years 2010 and 2011:

• Notification by Sweden ³ which sets out termination rates to the order of 2.50 cents from July 2010 and 2.18 cents from July 2011;
• Memorandum of Finland ⁴ with guidelines setting out that the maximum termination rates should not exceed 4 cents in 2010 and 3.5 cents in 2011;
• Notification of France ⁵ to the EC, which indicates termination prices of 4.5 cents and 6 cents by the end of June 2010 and 3 cents and 3.5 cents thereafter ⁶;
• Decision of Italy ⁷, in which termination rates are determined at around 6.60 cents for the two largest operators, 7.20 cents for the third operator and 9.0 cents for the fourth operator, as of July 2010, and termination rates of 5.3 cents for the three largest operators and 6.3 cents for the fourth operator, from July 2011;
• Decision of Austria ⁸, in which termination rates are established at around 3.50 cents from January 2010, 3.01 cents from July, 2.51 cents from January 2011 and 2.01 cents from June 2011;
• Notification of Romania ⁹ to the EC, which indicates termination rates to the order of 5.03 cents for the two largest operators during 2010, of 5.67 cents and 5.03 cents for the two smaller operators, respectively in January and July 2010, and 6.4 cents and 5.67 cents for the new entrant, respectively, on the dates specified.

If we calculate the average of the mobile termination rates that these six countries will have in November 2011, we arrive at a figure of 3.5 cents per minute.

Finally, notwithstanding the benchmarking considered above, it is noted that, after the statements of Commissioner, Lithuania has established termination rates to the order of 2.89 cents, to apply in 2011. Likewise, note is made to the referenced cases of the United Kingdom and the Netherlands, whose termination prices in mid-2011, should be to the order of 3 cents.