On 22 June 2004, Sideamet, the Estonian regulatory authority, issued an Instruction to the fixed incumbent operator Elion (formerly Eesti Telekom) to lower its interconnection charges.

According to regulation no 313 of December 11, 2003 “Cost Accounting Methodology for Leased Line and Interconnection Service Charges,” Elion’s interconnection charges are to be calculated based on a bottom-up Long-Run Average Incremental Cost (LRAIC).

The regulator set the interconnection charges as follows (in Eurocents):

Elion objected to the charges determined by Sideamet. The regulator then re-calculated the charges, based on the arguments presented by Elion and has published the newly calculated (higher) charges today.

The interconnection charges will be as follows (starting from 1 Oct 2004):

On average this represents a reduction of 17% of the pre-June interconnection charges, but an increase of on average 3% of the charges imposed in June.

From the tables it becomes clear that the balance between set-up charges and per minute charges has shifted, whereby the set-up charges have been lowered by 3% (local and single transit) and 2.7% (double transit) respectively. The per minute charges on the other hand have been increased by 6.9% for local and single transit and by approximately 5.2% for double transit, vis-à-vis the charges imposed in June.

Elion has issued a press release stating that it will accept the new charges.