3 ordered to cut wholesale termination rates

3 Dec 2008

Ireland’s telecoms watchdog the Commission for Communications Regulation (ComReg) has ordered Hutchison 3G Ireland (3) to reduce its wholesale voice call termination rates, having found that there is a separate market for wholesale call termination services supplied by 3 Ireland. The regulator has published its review of the domestic mobile market for termination call charges on 3’s network and concludes that the cellco holds a dominant position owing to its 100% market share, presenting significant barriers to market entry in the segment. As a result, ComReg finds 3 to have significant market power (SMP) requiring it to impose new price controls, including price transparency and non-discrimination obligations on the 3G-only operator. ComReg chairman John Doherty said: ‘Mobile termination charges are the wholesale rates that terminating operators, both fixed and mobile, pay to the originating operator for calls that are connected to subscribers on the originating operator’s network … They affect consumers indirectly because they are factored into the prices consumers pay at the retail level for fixed-to-mobile and mobile-to-mobile calls. Reductions in these charges, as applied by 3 in line with the reductions by other mobile operators, will bring benefits to both fixed and mobile customers in terms of lower charges.’

ComReg’s decision comes just a week after the cellco was selected as the preferred supplier for a government contract to complete the rollout of broadband services in the Republic. 3 has more than 300,000 subscribers, of whom 105,000 are mobile broadband users. The Hutchison Whampoa-backed company has invested EUR530 million (USD670 million) in its networks and services to date, and employs around 200 people.