MOBILE TERMINATION: TO REGULATE OR NOT TO REGULATE?

SESSION 6: MOBILE TERMINATION: TO REGULATE OR NOT TO REGULATE?

Moderator: Dr. M. Treschow, Director General, National Post and Telecom Agency, Sweden

GSR Discussion Paper on Mobile termination: to regulate or not? [presentation]
Dr. Vaiva Lazauskaite, Economic Analyst, ITU/RME

Interactive panel discussion:

• Should mobile termination rates be regulated or left to the market? What regulatory approach to choose?
• Symmetric regulation to promote investment and competition: can the EC approach be replicated in other parts of the world?
• How are convergence, NGNs and the transition to all-IP networks changing the situation?

Panelists:

• Mr. A. Alfehaid, Deputy Governor, Communications and Information Technology Commission (CITC), Saudi Arabia
• Mr. A. Haire, Deputy Director General (Telecoms & Post), InfoComm Development Authority of Singapore (IDA)
• Mr. J. Salvat, CEO, Servei de Telecomunicaciones d’Andorra (STA)

Mod: is there a need for regulation of MTR’s. I think we need to look at the consumer to answer this question.

Singapore: I view as regulation any decision made by the regulation. This also is not making a decision. It is necessary to understand when you are not going to make a decision. We do regulate parties with Significant Market Power. We do make decisions on someone who has control over a bottleneck. Communication is about three things: It is about getting on the network, going across and getting off the network (to another network). In Singapore we have noticed that when getting off the network onto a mobile network, we know that the Mobile companies have an incentive to raise prices. And the nice thing is they can tax someone who isn’t their customer. We have set our termination rate at zero therefore. At the retail layer we have a called party pays layer. At the wholesale layer we have a mobile network party pays. We did get a problem with arbitrage so we did get involved here (No explanation on what the problem was and how they did it)

Saudi Arabia: I would like to see more comparisons between nations. We need to know whether we should regulate or not. The question is when we can get rid of MTR. It is only when we have a mature market, with a fair spread of customers and traffic between networks.

Andorra: In our region the market is very mature. We should look at how many users there are and how they are using it. We  have a mature market. We should get rid of regulation of MTR;s and leave it to the market. If we regulate MTR’s we might see operators loosing interest in the pre-paid market.

Singapore: I belief that MTR rates are part of a big Mosaic. What we have done is create a highly competitive market. It is ruthlessly competitive. Maybe HongKong is more competitive. It is not just MTR’s. We have also prevented the use of SIM-Locks. These came on the market with the iPhone. We think that the services and handset market should be separate. We have repeatedly said no. Before the iPhone came on the market we warned the operators we wouldn’t allow SIM-locks. We now have an extremely vibrant market. When the third marketplayer came in the market. This guy was certifiably mad. He started to give away free incoming calls. His marketshare rose to 15%. Than the other two did the same and this madman again did something. He started with free international calls to seven nations.

We now have 6 pure VoIP play. The mobile players didn’t want to interconnect with them. They didn’t even answer a phonecall. In the end we put them in a room and got them discussion going. By 2007 we had worked out something.

Mod: What do you think of next generation networks

Andorra: We only have one operator. In our case we are unsure about NGN. We don’t have a peering point in Andorra. We assume that the costs will be the same because we will pay more on transit.

Saudi Arabia: In my opinion we are all going to review the existing systems and regulations. We think the existing system can’t be maintained.

Singapore: We are almost finished with our national broadband network. We are finished with all the interconnection stuff. It is all an open interconnection framework. We have based open access. We now have to mesh that with the traditional models. We are bringing three models into one, the new NGN, the old internet and the mobile network.

Gentleman from Africa: We didn’t have MTR’s between mobile operators and we did have fixed mobile termination termination at 0.30 US dollar. We are now regulating them and they fell 0.15 US dollar. Most mobile operators are not necessary even though  they are 0.09 USD now.

Lebanon: in Lebanon we have a kind of Bill and Keep regime between fixed and mobile. (than he quotes some of my paper and its statements, which you can find online. Much thanks for that!)

Mod: in the EC we are currently discussing this. We are discussing how we are going to get to Bill and Keep.

Question asked on termination rate to Wimax. Nobody comes up with a good answer it seems.

African nation asked what should be done when operators don’t want to negotiate a termining rate.

Singapore answers that they will revoke the license of the party not willing to interconnect.

African Nation answers that the impact will be much larger than if they let it continue. Singapore answers that they give fair warning. This is also a signal to the customers to leave the  network or other ways they are in trouble. This is enough to push telco’s in the right direction.

Saudi: We give parties 60 days to agree and if they don’t we set the prices for them.

North African nation. We had two mobile networks. When the third one came into the market we noticed that the two started an interconnection regime that favors big parties from small ones. Than we noticed that onnet charges were lower than off-net charges. Than we put the termination charge at 65% of the on-net charge.

Himalayan nation: To Singapore, is it fair to have a termination rate at zero. Isn’t it harsh to those parties. Because to terminate a call some resources are used.  I would like your opinion.

Moderator: Thanks audience and forgets to ask Singapore to answer the question. 
Later Singapore answered that the telco's do get their money, but from their own customers. Not from someone elses customers