ANACOM - National Communications Authority has decided to lower the local loop prices charged by PT- Comunicações to alternative operators as from 1 January. According to the regulator's draft decision, the local loop monthly price is reduced to an amount of 8,72 euros, 10% less than the current price in force, which is 9,72 euros. As regards the shared access, the monthly price is reduced by 24%, to 2,24 euros.
The regulator has decided to leave the loop installation price unchanged, which shall be charged 38 euros as previously. This is a competitive price when compared to the prices practised in the EU 15 as regards the loop installation price in the full access and shared access modalities, since it is the fourth less expensive price in the EU 15.
As to the local loop monthly price, in the full access modality, 8,72 euros, it is the third best price of the European Union. The price established for the local loop monthly price is around 20% below the price defined by the regulator for the SLRO - Subscriber Line Resale Offer, a difference which aims to encourage business models which engage on infrastructure investment; and 31% below the monthly subscription price charged by PT to its customers.
The prices defined by the regulator for the local loop provision represent an upgrade relatively to the proposal put forward by PT- Comunicações, which intended to maintain the prices currently in force throughout the next year. It should be borne in mind that ANACOM requested of PTC, in September, that it put price proposals forward, in order to introduce a new tariff in the beginning of the year, thus making the market functioning more predictable. The purpose is to make operators more aware of the costs involved in their activity as soon as the year begins, thus giving them the opportunity to develop their commercial offers according to those values.
The regulator's intervention in the Local Loop Unbundling has been fundamental to promote competition in the broadband market, enabling new operators to reach their customers' places directly, without resorting to PT, and to develop more competitive commercial offers. The intervention has increased the trust and certainty of competitive operators and service providers, who have started to show an increased interest and to invest significantly in this offer. This interest may be inferred from the evolution, since the beginning and the third quarter of the year, of unbundled loops, which is now around five times higher; of the number of co-installed operators, which doubled; and of centrals where operators are currently co-installed, which has increased by 50%.
The new local loop prices defined by ANACOM are now subject to a prior hearing of interested parties for a 10-working day time limit.
ANACOM determines on the termination of contract procedure
The regulator has also decided to grant 10 days to PTC to alter the Reference Unbundling Offer (RUO) in order to integrate the decisions of the regulator as regards the simplification of procedures in the scope of the local loop.
The local loop unbundling, in the full access modality, determines the termination of the contract between the customer who wants the unbundling and PTC, and the conclusion of a new contract with a different company where the loop is unbundled to.
The incumbent must initiate the local loop supply procedure as soon as it receives the pre-order from the operator receiving the loop, without verifying whether or not termination notices or authorizations are valid.
ANACOM approved also a draft decision on the information that PT and other operators must submit to the regulator in the scope of the RUO, to access to up-to-date and detailed information on time limits practised for several services related to the local loop. The purpose is to monitor the market appropriately in the scope of the local loop unbundling and to enable a higher effectiveness in the introduction of the offer - an essential element to the sector's competition increase - having regard to the fact that, in case of need, the regulator is qualified to intervene swiftly, imposing remedies and protecting final consumers.
The decisions taken in the scope of the LLU in the recent past have created the conditions to swiftly bring the available wholesale offers - in terms of prices and time limits - closer to the appropriate levels considering the specific features of the Portuguese reality. All the conditions are now gathered for the establishment in 2006 of an environment of general competition - an unprecedented situation for the sector - which is encouraged by the launching of new instruments as the SLRO and the flat interconnection tariff.
The Board of Directors of ANACOM approved also a draft decision which reduces to four months the withdrawal period during which the companies of the PT Group are prevented from developing any action designed to win back customers pre-selected by other operators.
In the view of the regulator, the establishment of a withdrawal period, during which the companies of the PT Group are prevented from undertaking any win-back action, is deemed to be an appropriate means to allow the client a free and informed choice of the service intended, trying it out and remaining free to continue being a client or to release himself from the contract, without being under any external pressure. However, the evolution of the competition situation justifies the reduction of the withdrawal period.
In fact, although in September the PT Group had around 91% of access, at the level of telephone traffic at a fixed location the competitive situation is clearly better, the voice traffic share of the PT Group in minutes being reduced to 74%, which results from a significant increase of the weight of indirect access traffic. Moreover, there are new instruments, in addition to the preventive win-back actions already in force, such as the SLRO and the extension of eligible pre-selection traffic, which represent an additional encouragement towards a reinforcement in the short/medium term of competition in retail markets of telephone service at a fixed location; likewise, the reduction of the churn rate itself which new operators register in the scope of this facility, on account of the fact that, being PTC prevented from billing customers, the bills cease to be used as a means to contact customers in the scope of a win-back action. Moreover, the tendency towards a single bill issued by these indirect access providers may encourage customers to maintain the pre-selection contract.
Consult:
- Procedure for termination of contract in the scope of the LLU https://www.anacom.pt/render.jsp?contentId=418614
- LLU prices in force as from 1 January 2006 https://www.anacom.pt/render.jsp?contentId=418701
- Information to be gathered to monitor the market in the scope of the LLU https://www.anacom.pt/render.jsp?contentId=418707
- Restrictive measures against action designed to win back pre-selected customers https://www.anacom.pt/render.jsp?contentId=1087072
