British telecoms regulator Ofcom has launched a consultation on its market review of mobile termination rates (MTRs) for the period 1 April 2018 to 31 March 2021. In its review, the watchdog said it is seeking to assess competition in the provision of mobile call termination (MCT) and to consider the appropriate form of ex ante regulation, if any, that should be imposed to ensure consumers are protected from ‘any harm arising from market power’.
In terms of its proposals, Ofcom plans to define the markets as in previous reviews, with its preliminary finding being that there are 80 markets, each corresponding to a provider able to set a termination charge for calls to the UK mobile numbers allocated to it by the regulator. Notably, it has said it does not intend to widen the market definition to include voice calls terminated using Facetime, Skype or WhatsApp. Meanwhile, under the plans each and every provider holding UK mobile numbers will be deemed as having significant market power (SMP) with respect to the (wholesale) market for terminating calls to the numbers it controls. All 80 of these providers face regulation via the imposition of two of the four remedies that are currently applied in this market, namely: an obligation to provide network access on fair and reasonable terms and conditions; and a charge control, with a single maximum cap on MTRs to be based on the long-run incremental cost (LRIC) of MCT. In terms of the proposed termination rates, Ofcom is seeking to reduce the charge from its existing level of GBP0.00495 to GBP0.00468 from 1 April 2018, with two further reductions to GBP0.00449 and GBP0.00443 from 1 April 2019 and 1 April 2020, respectively.
Ofcom’s consultation closes on 5 September 2017, and it has said it plans to notify the European Commission (EC) of its final decision on MCT regulation by February 2018, before publishing a statement by March that year.