CMT finalises fixed and mobile termination regulations

5 Jan 2009

Spanish regulator the Telecommunications Market Commission (CMT) has announced it has approved regulations for fixed and mobile termination rates for the next two years. The regulator stated it has established the definition of both markets following both public consultation and input from operators and governing bodies, including the European Commission and the National Competition Commission. For fixed line termination, market leader Telefonica will be required to align its termination rates in line with production costs. Alternative operators’ rates will have a maximum differential of 30% compared to Telefonica, following the ruling that smaller operators do not benefit from the same economies of scale as the incumbent. The regulator also considered interconnection via IP technology, concluding that Telefonica must report any development of its next generation network infrastructure to the CMT and other operators twelve months in advance.

In the mobile market the CMT confirmed that it will retain the current system of price regulation based on a glide path, with rates expected to be reduced every six months. The CMT is expected to define the glide path by 30 July 2009 and it is expected to be implemented on 15 October 2009. Movistar, Vodafone and Orange will all be required to set termination rates in line with their costs while MVNOs will be expected to implement rates considered ‘reasonable’ by the regulator based against the rates of the host network.