The European Commission’s eCommunications Consultation Task Force (eCCTF) has published a letter (dated 4 Aug 2004) relating to a notification made by the Greek regulatory authority EETT in the context of Market 16: “voice call termination on individual mobile networks”.
The letter is distinctly precedent-setting, regarding:
- Notification, and eCCTF comments, prior to transposition
- Treatment of SIM Gateways
- Glide-path towards cost-orientation
- Accounting separation as a remedy
EETT has chosen to notify the European Commission, even though Greece has not yet transposed the EU directives on electronic communications networks and services, and the eCCTF has decided to accept the notification, and made the following statement in this regard:
“In accordance with the EU regulatory framework, EETT is entitled to carry out any market analysis (including the definition of the relevant market(s) appropriate to national circumstances) prior to transposition of the EU regulatory framework into national law. In this context, the Commission considers that the validity of the outcome of the present assessment is based on the assumption of a correct transposition of the EU regulatory framework into national law to the extent that the provisions concerned by this assessment are relevant.”
T-REGS Note: As such, this is not news, but it can be considered to represent a strong encouragement to the authorities in Member States that have not yet transposed the EU directives to follow the Greek example.
With regard to the market definition, EETT considers that the provision of wholesale voice call termination by each individual mobile network operator (2G and 3G) constitutes a separate product market and that the geographic scope of each market coincides with the geographic coverage of each network. EETT has concluded that each mobile network operator in Greece (Cosmote, Q-Telecom, Telestet and Vodafone) should be designated as having significant market power on their respective relevant market, and the eCCTF is validating this conclusion.
EETT also considers that the routing of calls through SIM Gateways does not form part of the relevant market since, according to EETT, the use of SIM Gateways cannot currently be considered as a substitutable product to voice call termination on individual mobile networks. However, EETT proposes to impose an obligation of non-discrimination on all mobile networks, including an obligation not to unjustifiably deny the termination of calls delivered to their respective network through SIM Gateways.
The eCCTF letter addresses this issue at length, and concludes on this point as follows:
“[…] The Commission considers that the proposed obligation is not intended to remedy a SMP finding in the product market covered by this notification, but may pertain to a potential finding of dominance in another relevant market. […]. Therefore, the Commission invites EETT to demonstrate in the final measure that the non-discrimination obligation in respect of GSM gateways either pertains to the finding of SMP in the relevant product market or is sufficiently justified as an essential element without which the proposed obligation of cost-orientation imposed on the relevant market would be ineffective.”
T-REGS Note: This appears to suggest a recognition by the European Commission of a role for SIM Gateways in putting pressure on wholesale mobile call termination charges, and the European Commission is offering the EETT an option that is likely to meet with its approval, i.e. a linkage with the obligation of cost-orientation.
EETT proposes a glide-path towards cost-orientation. The European Commission is quite outspoken in the eCCTF letter in this regard, by stating that:
“[…] … the Commission stresses that the very high level of termination charges in Greece, which has led to an imbalance of tariffs between wholesale and retail levels, should be tackled as soon and efficiently as possible and in this context, EETT is invited to reconsider whether the glide path envisaged in the present case should not foresee larger reductions.”
EETT considers that accounting separation should not, at this stage, be part of the obligations, but that the appropriateness of imposing such a remedy will be reviewed after 1 year. The eCCTF disagrees, and the letter states clearly that the Commission considers the imposition of an accounting separation obligation to be justified as an appropriate complement to the other proposed obligations.
The letter has also been added to the T-REGS repository of eCCTF letters. Click on Documents at the top right of this website to access the repository.