While announcing that it will impose harsh reductions in mobile operators' Mobile Termination Rates (MTRs), the Spanish Commission for the Telecommunications Market (CMT) has conceded to operator demands to have the cuts implemented over a longer period.
The reductions of between 40 per cent for Telefónica Móviles, Vodafone and Orange--and 50 per cent for Xfera--of their MTR charges will be applied over the next two years based on a biannual schedule of reductions, technically known as a glide path. However, the CMT came under pressure from the three main operators and has now suggested that the price cuts associated with the glide path be extend by six months. The price reductions will start in October 2009 and now end in April 2012.
At the end of the glide path Telefónica Móviles, Vodafone Spain and Orange Espana will be allowed to charge a maximum MTR of €0.04 per minute, while Xfera Moviles (Yoigo), the market's newest entrant having launched services in December 2006, will have a maximum rate of €0.0497 per minute. At present the three long-standing players have MTRs of €0.07 per minute, while Yoigo's rate is set at a maximum of €0.1041 per minute. The CMT has justified its decision to allow Yoigo a higher rate by arguing that, as a newer operator, it does not yet benefit from the economies of scale of the other operators.
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