NMa: Separate Market for Call Termination for Each Mobile Operator

All five mobile telephone operators in the Netherlands (KPN Mobile, Vodafone, Dutchtone, Ben en O2) have a dominant position on their own mobile telephone networks with regard to the termination of calls. A mobile telephone operator, after all, experiences little serious competition in setting its tariffs for call termination on its own mobile network. This means that there is a separate market for call termination services for each mobile telephone operator. This is the conclusion of a report published today by the Netherlands Competition Authority (NMa). In 2001, NMa launched an investigation into price levels for calls from a telephone connected to the fixed network to a mobile telephone. The first step in this investigation was an extensive market analysis, which has now been presented. NMa was assisted in drawing up the report by the research firm, London Economics.

The recipient operator charges a tariff for the termination of a call. This tariff is paid by the operator from whose network the call is made (the originating operator). This is due to the chosen settlement system, which is based on the so-called calling-party-pays principle. As the customer of the operator of the terminating network is generally not confronted with the cost of terminating the call, there is little incentive for the terminating operator of the mobile telephone network to charge competitive prices.

Since a number of disputes with regard to the level of termination tariffs charged by mobile operators have been brought before OPTA, NMa will leave the initiative for the follow-up of this investigation to OPTA. This method of work is in accordance with the agreements set out in the cooperation protocol agreed to by NMa and OPTA. This report provides important input into the settlement of these disputes. Within Europe, particularly with a view to the new rules governing telecommunications, an intense discussion is underway with regard to the termination of calls. NMa's report is also important for this discussion.

The report may be obtained from NMa's website www.nma-org.nl (external website) . London Economics' research report is attached as an appendix.