Charges for calls from landline to mobile phones drop further: OPTA announces initial findings of market analyses
The Commission of OPTA, the Independent Post and Telecommunications Authority, wants to reduce charges for calls from fixed to mobile phones even further. Providers holding significant market power are active in the market for terminating calls (receiving calls) on mobile phone networks. They can determine their charges themselves, because they do not experience the pressure of competition. End users consequently pay too much for calling mobile phone numbers. However, there is enough competition in the market for originating calls (making calls) from mobile phone networks. This means that KPN will no longer be deemed to be a party holding significant market power in this market.
Every owner of a mobile phone network (KPN, Orange, Telfort, T-Mobile and Vodafone) – as well as Tele2 in its capacity as the owner of specific parts of a network– holds a dominant position in the market for terminating calls. This has produced excessively high tariffs. OPTA therefore wants the charges for terminating calls to be based on the underlying costs. This must be done by means of a gradual reduction, which is to be prescribed by OPTA and is to be implemented by no later than July 2008. This means that calls from landline to mobile phones must ultimately be between 30% and 40% cheaper than they are now. It is anticipated that this will yield annual savings of approximately €150 million for callers. This will bring Dutch tariffs more into line with those of other European countries.
OPTA sees no reason to continue regulating the market for originating calls any longer. Until now, KPN has been designated as a party holding significant power under the former telecommunications legislation. However, with five fully competing networks and a number of other mobile telephony providers, there is no reason for OPTA to intervene in this market in advance. None of these parties has a market share in excess of 40%. There is sufficient choice available for both end users and buyers of wholesale services. This will afford greater freedom to KPN in its negotiations on access for other companies to its network.
OPTA has come to these conclusions on the basis of an in-depth analysis of the two mobile telephony markets. The new telecommunications legislation which came into effect on 19 May 2004 mandated OPTA to do this. Today, it has presented its draft decisions. They will be the subject of extensive national consultations, which will enable everyone to submit their views to OPTA. In addition, our European fellow regulators may present their views and the European Commission’s consent will be required for these decisions. OPTA anticipates that these decisions will come into effect at about the end of the summer.
OPTA has to determine whether there is sufficient competition in a total of at least 18 electronic communication markets designated by the European Commission. In the months ahead, OPTA will be presenting draft decisions covering the broadcasting, broadband services, leased line and fixed telephony markets.