CNMC proposes reduction in fixed termination rate

10 Apr 2014

Spain’s telecoms regulator, the Comision Nacional de los Mercados y la Competencia (CNMC), has outlined proposals under which the fixed termination rate will be cut by up to 88%. In a press release the watchdog revealed plans to establish a single rate of EUR0.00862 (USD0.01) per minute, which it noted would represent a drop of up to 79% for fixed line incumbent Telefonica Espana, and 88% for the nation’s alternative operators. With the CNMC confirming it has begun a review of the competitive situation in the fixed line market, it has proposed the designation of all operators as holding significant market power (SMP), meaning all would be subject to regulatory obligations.

While for the past six years alternative operators have been able to charge termination rates at 30% more than the regulated tariff of Telefonica, the CNMC now argues that asymmetric fees should end, claiming that to maintain the current system would distort the market and harm consumers.

Having highlighted the fact that its proposals follow recommendations made by the European Commission (EC) on termination pricing, a consultation regarding the plans will be carried out for a month, with industry players invited to submit their views. Subsequently, the CNMC has said it will then forward its draft proposals to the EC before making a final decision.