CMT approves MTR cuts

31 Jul 2009

The Spanish telecoms regulator, the Telecommunications Market Commission (CMT), has announced that it has approved a cut in mobile termination rates (MTRs) of between 40% and 50%. The new rates will be introduced gradually over a two-year period, with the first incremental reduction expected to be enforced on 16 October this year. At the end of the two-year plan Telefonica Espana, Vodafone Spain and Orange Espana will be allowed to charge a maximum MTR of EUR0.04 (USD0.06) per minute, while Xfera Moviles (Yoigo), the markets newest entrant having launched services in December 2006, will have a maximum rate of EUR0.0497 per minute. At present the three long-standing players have MTRs of EUR0.07 per minute, while Yoigo’s rate is set a maximum of EUR0.1041 per minute. The CMT has justified its decision to allow Yoigo a higher rate by arguing that, as a newer operator, it does not yet benefit from the economies of scale that the other cellcos do.