The German regulatory authority BNetzA announced today that it has decided to reduce Deutsche Telekom’s interconnection charges by 10% on average. The decision will enter into effect on 1 June 2006 and is valid until 30 Nov 2008.

The regulator's decision stands in sharp contrast with the request that Deutsche Telekom had filed with the BNetzA and which triggered the proceeding on interconnection charges.

On 22 Feb 2006, the request of Deutsche Telekom (DTAG) was published in the Official Journal (Amtsblatt) of the BNetzA. DTAG requested an increase of the local interconnection charges (by 33% for peak and 35% for off peak calls respectively) and coupled this to a proposed decrease of the single and double transit interconnection charges. DTAG motivated its request by stating that PSTN traffic has decreased considerably since 2003. DTAG added that the alternative operators are steadily moving into the 474 local interconnection areas, thereby causing a shift of DTAG’s costs to the periphery of the network. DTAG also argued that it would not be appropriate to make comparisons with operators in other countries, due to the fact that DTAG is now using Element Based Charging (EBC).

It has become clear today that the BNetzA did not follow DTAG’s logic. Not only did BNetzA lower the local interconnection charges, it also declared that the interconnection charge levels requested by DTAG for double transit calls were clearly below the cost of an efficient provider. The BNetzA used data from international benchmarks and also from a model independent from DTAG’s EBC model to support its findings.

The interconnection charges imposed by BNetzA are presented in the table below, together with the previously applicable charges and the charges proposed by DTAG, but not accepted by BNetzA.