Pelephone joins fight against MTR reduction proposals

30 Jun 2010

Israeli mobile network operator Pelephone has reportedly filed a study which challenges proposals set forward by the Ministry of Communications (MoC) last month for lower mobile termination rates (MTRs). According to Globes Online, Pelephone, which is a wholly owned subsidiary of fixed line incumbent Bezeq, has joined fellow mobile operators Cellcom and Partner Communications in criticising the regulator’s plans. Pelephone’s study claims to have found ‘serious errors in the calculations’ made in a study prepared for the MoC by NERA Economic Consulting; one error the cellco highlighted was the number of base stations in operation, which it claims is 2,100 compared to the 1,700 cited by NERA. The study commissioned by Pelephone argues that there are substantial gaps between the recommendations made to the ministry and the actual costs faced by the operator, with further claims that NERA had not considered additional investment costs, including investment in monitoring systems and engineering teams. Pelephone also maintains that the effect of reduced connections fees on callbacks has not been sufficiently addressed, claiming that lower fees will widen the gap between fixed to mobile calls and mobile to fixed calls, with increased traffic from the former to the latter a likely by-product of the proposed MTR reductions.

As previously reported by CommsUpdate, last month the MoC gave the country’s mobile operators a month to respond to the proposals, which will see MTRs fall by 84%, from ILS0.251 (USD0.067) per minute to ILS0.0414 per minute, with the regulator hoping to have ratified the new legislation by the end of the year, and introduced the initial cuts by that date. The proposals also call for further cuts to termination rates, with the MoC looking to reduce the charge to 0.0311 per minute from 1 January 2012; to ILS0.0280 per minute from 1 January 2013; and to ILS0.0257 from 1 January 2014.