EC investigates Lithuania's approach to fixed call termination market

28 May 2015

The European Commission (EC) has opened an investigation into the Communications Regulatory Authority (RRT’s) proposed analysis of the wholesale market for fixed call termination. Brussels launched a ‘Phase II’ investigation to further assess the appropriateness of the Lithuanian watchdog’s proposed market definition, which ‘does not seem to be defined in accordance with EU telecom rules and competition law principles’, as well as the proposed price control regulation, ‘which does not seem to be set at a cost level reflecting the costs of an efficient operator’. The EC is concerned that the RRT’s analysis is not clear as to whether the market is limited to the termination services or also includes transit, which it says should be excluded from the market definition. The RRT also includes in the market the termination of calls to non-geographic numbers, without sufficiently justifying why the characteristics of this type of termination allow for its inclusion in the relevant market. Therefore, the EC says it has serious doubts as to whether the termination markets in Lithuania have been defined in accordance with the EU telecom rules and with competition law principles.

Additionally, the Commission is concerned that termination rates in Lithuania may be set at a cost level which does not reflect the costs of an efficient operator, thus artificially inflating end-users’ phone bills. The EC may, at the end of the two-month investigation, either lift its reservations on the market definition or demand that the Lithuanian regulator withdraw its measure. After an additional month of investigation, the Commission may either lift its serious doubts or issue a recommendation requiring the RRT to amend or withdraw its price control measure.