The consultation runs until October 10, 2011, [and] is the first time that ARCEP has proposed regulating the MTRs of MVNOs in France. [W]e see more NRAs in the EU adopting such a policy in the near future.
ARCEP was the first regulator in the EU27 to impose SMS price regulation and is now undertaking a market analysis of mobile termination rates of MVNOs. ARCEP is of the opinion that new players and independent MVNOs should be subject to the same set of obligations as established players. As a result, ARCEP has concluded that the three new operators have significant market power (SMP) in their respective markets. In keeping with existing regulation governing mobile call termination for the three mobile network operators in France, ARCEP considers it necessary to impose obligations concerning access, non-discrimination, transparency, and price control.
A growing number of countries in the EU15 are imposing regulations on the MTRs on MVNOs, and France is now following the same path as these countries (Austria, Denmark, Finland, Germany, the Netherlands, Spain, and Sweden). We expect more NRAs in the EU to consider regulating the MTRs of MVNOs when they conduct the next round of market 7 (mobile termination services market) analysis.
At this stage of the consultation process, ARCEP has not decided on the details of the price control obligations and will assess the…approach only after the industry responds to the consultation document. In those countries where regulation already exists, a variety of approaches to price control on SMP MVNOs has been taken. SMP-designated MVNOs in Austria, the Netherlands, and Spain have been subject to the same MTRs as their host MNOs. The Swedish regulator (the PTS) imposed a price control on SMP MVNOs and regulated prices will be based on a pure-LRIC model to be implemented before January 1, 2013.
In contrast, the Danish regulator (the NITA) imposed a “light-touch” regulatory price control in which MVNO’s MTRs are set at a higher level than MNOs and based on benchmarking of MTRs in other countries. The Finnish regulator (FICORA) has not imposed any price controls on SMP MVNOs.
As of December 2010, France had 31 MVNO contracts with the three existing operators. The market for MVNOs saw strong growth in the first quarter of 2011 in France, with more than 570,000 additional users. The market share of MVNO operators increased from 6.3% in March 2010 to 8.4% in March 2011, according to ARCEP.
However, MVNOs in the French market have not had a significant impact on competition so far, and the regulator will likely adopt an asymmetric MTR level compared to the regulated MTRs of MNOs. In addition, the French average level of MTRs ranks the lowest in the EU15 and the second lowest among the EU27, in our latest benchmarks (Europe & Americas Interconnect Benchmarks: Q2 2011).
According to the glide path that was adopted by ARCEP in November 2010, the MTRs for the three mobile network operators (Orange, SFR, and Bouygues Telecom) will be 0.8 euro cents per minute from January 1, 2013. We think a “light-touch” regulatory price control approach on SMP MVNOs is suitable at this stage.
Original article: Arcep considers regulating mobile termination rates of MVNOs