3GScottishUser
30th March 2006, 08:50 AM
Today Ofcom has issued a consultation document that determines that they consider all 5 UK networks to have Significant Market Power.
"There are separate markets for mobile voice call termination supplied by each of the UK MNOs (ie Vodafone, O2, T-Mobile, Orange and Hutchison 3G UK (H3G), and the prima facie evidence indicates that each of these mobile operators has Significant Market Power (SMP) in the market in which they supply wholesale mobile voice call termination. "
Ofcom suggests that this will not change over the next few years.
Some further consultation points:
"Ofcom is continuing to work with the industry to develop a new cost model for mobile voice call termination (including the costs of delivering voice call termination on both 2G and 3G networks). Ofcom is not, therefore, attempting to indicate in the present consultation document what is the appropriate level of charges for wholesale voice call termination (Ofcom expects to address that question in the next consultation exercise to be published during the summer of 2006). Nevertheless, all 5 UK Mobile Network Operators (the 5 MNOs) are now terminating some voice calls on 3G networks, and the volumes can reasonably be expected to increase sharply over the period to 2011. Charge controls, such as those in force today, which apply only to termination on 2G networks, are likely to present artificial incentives for the charge-controlled MNOs to develop the means to use unregulated 3G networks to terminate traffic in preference to 2G networks.
Furthermore, the present system of blending regulated 2G charges and unregulated 3G charges to set a weighted average charge to apply to all forms of termination (distinction on a call by call basis not being possible) provides MNOs with both the incentive and opportunity to set high unregulated underlying charges for 3G and so above-cost blended charges. Ofcom notes that Vodafones termination charges now include underlying charges for the proportion of calls which are terminated on its 3G network which are more than twice the underlying regulated charges for 2G termination within the blend and this has increased beyond the regulated 2G level, the blended charge levied for all forms of termination. Furthermore, the reasons in the last market review for not regulating 3G (that only H3G was terminating voice calls on a 3G network and H3G had at the time less than 1% of the UK subscribers) have less weight in the context of the current review. Ofcom is proposing, therefore, that
Any SMP conditions, including any charge controls, should apply to termination on both 2G and 3G networks
Ofcom has noted that, currently, MNOs are unable to determine on a call by call basis which network type (2G or 3G) should be used to terminate any given call; 3G capable phones are programmed to standby to receive and make calls in 3G mode whenever within a 3G coverage area (as, otherwise, they would be unable to make or receive advanced 3G services standing-by in both modes simultaneously is not currently possible). Any call to a 3G capable phone which is in a 3G coverage area will, therefore, be terminated using the MNOs 3G network, and all other calls will be terminated using the 2G network. Consequently, callers and operators which originate calls to a mobile have no choice in how the call is terminated and would, in any event, be unlikely to have a preference, unless on price grounds, as the quality of voice call termination on 2G and 3G networks is indistinguishable. In summary, the choice of whether termination is achieved using a 2G or 3G networks is currently determined by technical considerations, and callers and originating operators have no means to influence the decision. For these reasons, and those more fully explained in section 7, Ofcom currently holds the view that
There would seem to be good reasons, subject to Ofcoms work developing a new cost model, for applying the same charge cap to termination on an MNOs 2G and 3G network, but Ofcom will need to ensure that the approach does not adversely affect prospects for future investment.
Ofcom is inviting detailed comments on the issues raised in the present consultation document by 25 May 2006."
So it looks like the rip-off 3G termination charges days are numbered!!
http://www.ofcom.org.uk/consult/condocs/mct/summary/
"There are separate markets for mobile voice call termination supplied by each of the UK MNOs (ie Vodafone, O2, T-Mobile, Orange and Hutchison 3G UK (H3G), and the prima facie evidence indicates that each of these mobile operators has Significant Market Power (SMP) in the market in which they supply wholesale mobile voice call termination. "
Ofcom suggests that this will not change over the next few years.
Some further consultation points:
"Ofcom is continuing to work with the industry to develop a new cost model for mobile voice call termination (including the costs of delivering voice call termination on both 2G and 3G networks). Ofcom is not, therefore, attempting to indicate in the present consultation document what is the appropriate level of charges for wholesale voice call termination (Ofcom expects to address that question in the next consultation exercise to be published during the summer of 2006). Nevertheless, all 5 UK Mobile Network Operators (the 5 MNOs) are now terminating some voice calls on 3G networks, and the volumes can reasonably be expected to increase sharply over the period to 2011. Charge controls, such as those in force today, which apply only to termination on 2G networks, are likely to present artificial incentives for the charge-controlled MNOs to develop the means to use unregulated 3G networks to terminate traffic in preference to 2G networks.
Furthermore, the present system of blending regulated 2G charges and unregulated 3G charges to set a weighted average charge to apply to all forms of termination (distinction on a call by call basis not being possible) provides MNOs with both the incentive and opportunity to set high unregulated underlying charges for 3G and so above-cost blended charges. Ofcom notes that Vodafones termination charges now include underlying charges for the proportion of calls which are terminated on its 3G network which are more than twice the underlying regulated charges for 2G termination within the blend and this has increased beyond the regulated 2G level, the blended charge levied for all forms of termination. Furthermore, the reasons in the last market review for not regulating 3G (that only H3G was terminating voice calls on a 3G network and H3G had at the time less than 1% of the UK subscribers) have less weight in the context of the current review. Ofcom is proposing, therefore, that
Any SMP conditions, including any charge controls, should apply to termination on both 2G and 3G networks
Ofcom has noted that, currently, MNOs are unable to determine on a call by call basis which network type (2G or 3G) should be used to terminate any given call; 3G capable phones are programmed to standby to receive and make calls in 3G mode whenever within a 3G coverage area (as, otherwise, they would be unable to make or receive advanced 3G services standing-by in both modes simultaneously is not currently possible). Any call to a 3G capable phone which is in a 3G coverage area will, therefore, be terminated using the MNOs 3G network, and all other calls will be terminated using the 2G network. Consequently, callers and operators which originate calls to a mobile have no choice in how the call is terminated and would, in any event, be unlikely to have a preference, unless on price grounds, as the quality of voice call termination on 2G and 3G networks is indistinguishable. In summary, the choice of whether termination is achieved using a 2G or 3G networks is currently determined by technical considerations, and callers and originating operators have no means to influence the decision. For these reasons, and those more fully explained in section 7, Ofcom currently holds the view that
There would seem to be good reasons, subject to Ofcoms work developing a new cost model, for applying the same charge cap to termination on an MNOs 2G and 3G network, but Ofcom will need to ensure that the approach does not adversely affect prospects for future investment.
Ofcom is inviting detailed comments on the issues raised in the present consultation document by 25 May 2006."
So it looks like the rip-off 3G termination charges days are numbered!!
http://www.ofcom.org.uk/consult/condocs/mct/summary/