ANRC Proposes New Tariffs for Interconnection with Incumbent Romtelecom Network

ANRC submitted to public consultation the maximum tariffs to be charged by Romtelecom for interconnection services on Monday. These suggestions were established upon the elaboration of a hybrid long run incremental cost calculation model (LRIC), resulted from the reconciliation of ANRC and Romtelecom models.

ANRC suggests a 3 step adjustment of tariffs for interconnection services, during a transition period, no later than the beginning of 2007, as follows*:

* Tariffs do not include VAT.
** Between 20:00-08:00 Monday to Friday and between 00:00-24:00 on Saturday, Sunday and legal holidays.

On a market without real competition, such as the market of access to the fixed public telephony networks for the purpose of call origination, termination and transit, there are no competition forces that could act in order to reduce the existing tariffs to an acceptable level. Applying the tariffs suggested by ANRC would lead to the development of a competition-driven market, where alternative operators would be able to provide services at tariffs comparable with those charged by Romtelecom, to the benefit of the end-users.

Thus, considering that costs incurred by interconnection services rank high among the total costs registered by an operator newly entered in the market, accelerating the implementation of cost-oriented tariffs - by means of reducing interconnection tariffs down to the level resulted from the hybrid model, during a 15 months period - would encourage both the operators' long term efficiency and the development of newly entered operators, would allow the recovery of efficient costs of past investments and would allow recovery of future investments. By making the cost-oriented interconnection tariffs public, ANRC also envisaged to provide the alternative operators economic with arguments as regards their decision to whether invest in their own infrastructure or use the network of Romtelecom.

The hybrid model used by ANRC in establishing these tariffs is based upon the elaboration and reconciliation of two calculation models - one model elaborated by Romtelecom, based upon costs resulted from the company's financial-accounting books, which required efficiency adjustments (costs related to the structural and operational inefficiencies of the operator were eliminated), and one elaborated by ANRC - started with an assessment of the demand for those services provided by the operator and based upon hypotheses of a technical-economic nature, only efficient costs being included.
The practice of using cost calculation models in order to establish cost-oriented tariffs for interconnection services is acknowledged as the best practice in this field and is used by most of the European Union member states.

The draft decision for establishing the tariffs for the interconnection services provided by Romtelecom, as well as the accompanying documents, are available on the website of ANRC. All those interested are invited to send their comments until the 19th of August, 2005. Comments and recommendations may be sent by mail to the ANRC headquarters at 14 Libertatii Blvd., Bucharest 5, or may be submitted directly to the ANRC registration office or at the territorial office of ANRC located in the nearest municipality. Comments may also be sent by fax at: +40 21 307 54 02 or by e-mail at: consultare@anrc.ro.

The National Regulatory Authority for Communications (www.anrc.ro) is the independent institution responsible for the implementation of the national electronic communications and postal services policy. By its activity, ANRC aims to accomplish several major objectives: promote competition, protect the best interest of the end-users and encourage effective investments in infrastructure.