NPT unveils new termination rates, symmetry expected by 2013

30 Sep 2010

The Norwegian Post and Telecommunications Regulatory Authority (NPT) has announced that it has adopted a resolution under which the country’s mobile network operators and mobile virtual network operators (MVNOs) will be required to reduce mobile termination rates (MTRs). Having used Long Run Average Incremental Cost (LRAIC) as the basis for the new charge proposals, the regulator revealed that symmetric rates would be in place by the beginning of 2013.

Under the new legislation the NPT has ruled that the market’s two largest operators by subscribers, Telenor Mobil and NetCom, will be required to initially reduce their termination rates to NOK0.30 (USD0.05) per minute from 1 January 2011 (down from the NOK.050 they currently charge), with the fee eventually falling to NOK0.15 from 1 January 2013. The regulator, however, has been more lenient with Network Norway and Tele2, which it said were ‘allowed to continue to take higher termination charges than they otherwise could have done, because [they] have committed that they will build a third mobile network [via] Mobile Norway.’ Of the two, Network Norway fares better under the new regulations, with it allowed to retain its current NOK0.90 per minute MTR until 1 July 2011, when it must then reduce it to NOK0.80, before making two further reductions (to NOK0.65 and NOK0.20) between that date and 1 January 2013, at which date it must fall in line with all other operators by dropping it once more, to NOK0.15. Tele2 meanwhile is required to make more drastic cuts initially, having been ordered to reduce its MTR to NOK0.50 from 1 January 2011 (down from NOK0.90); the NPT said that the lower rates were justified as it claimed that Tele2 will be able to recoup ‘almost its total share of the investment cost’ in Mobile Norway by the end of 2010.

MVNOs meanwhile will ‘be regulated the same way as the underlying networks they use, based on the network operator with the highest Long Run Incremental Cost (LRIC) result’, although the NPT has set down specific rates for TDC and Ventelo. Under the new legislation both the named MVNOs must reduce interconnection rates to NOK0.40 per minute from 1 January 2011, down from their current NOK0.75 rate, before dropping them further to NOK0.30 from 1 July 2011, NOK0.20 a year later and finally NOK0.15 at 1 January 2013.