Price analysis of F2M calls - UKE

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Price analysis of F2M calls

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2007-01-26

The Office of Electronic Communications has compared the prices of F2M calls for TP S.A. and its biggest fixed-line competitors.

The aim of the analysis was to examine price trends in fixed-to-mobile calls within the last three years. For a long time these calls had been among the most expensive ones and their price had not seemed to be vulnerable to any substantial changes. In November 2006, Telekomunikacja Polska S.A. introduced an important modification to their tariffs. The fall in retail prices was due to an earlier decrease in Mobile Termination Rates.

The analysis is focused on prices offered by Telekomunikacja Polska S.A. and its biggest competitors in terms of market shares, i.e. Netia S.A., Telefonia Dialog S.A., Tele2 Polska Sp. z o.o. and NOM Sp. z o.o.

The conducted analysis shows that between 2004 and 2006 the prices of calls from fixed to mobile networks fell by several times. In total, operators decreased peak rate calls by almost 40% and in the range between 10 and 20% for off-peak calls. Looking at the differences year by year, these reductions always reached 20%. The reduction in the prices of the services provided by the incumbent, i.e. Telekomunikacja Polska S.A., amounted to 27% at the maximum (regarding the social tariff scheme) and 23.6% (e.g. within the standard tariff scheme and in all schemes that employ per-second billing offered by TP) in 2006.

Each significant modification to tariffs was preceded by a modification to mobile termination rates. The NRA was actively involved in the modification of interconnection agreements.

As regards the latest reduction which took place in the fourth quarter of 2006, the reduction of costs as formed by Mobile Termination Rates had a direct effect on the level of retail prices in the tariff schemes that were offered at that time and in the standard tariff scheme no longer offered for sales but still used by almost 2 million subscribers.

The reduction introduced by TP did not result in corresponding and noticeable activities of competing operators despite the fact that they were first to sign relevant appendices to interconnection agreements with mobile operators and were in a position to offer competitive prices compared to TP and to take over a certain part of the market as a consequence.

The President of UKE, when approving new tariff schemes of TP, concluded that it will be sufficient to reduce the prices by the level of mobile termination rates at first and then to enable competition mechanisms to further influence the price levels.

  

 

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    INTRODUCTION
    The President of the Office of Electronic Communications (President of UKE) is the national regulatory authority for the market of telecommunications and postal services. The President of UKE is also the specialised authority in the area of equipment conformity assessment, including telecommunications terminal equipment and radio equipment.

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    International activity of the President of UKE consists of, inter alia, cooperation with the European Commission, other EU institutions and Regulatory Authorities of EU Member State. It includes also the cooperation within organizations of which UKE is a member, i.e. the International Telecommunications Union (ITU), the Body for European Regulators of Electronic Communications (BEREC) and the European Committee for Postal Regulation (CERP).


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