The Electronic and Postal Communications Authority (AKEP) has submitted for consultation the document on the results of the cost model of wholesale services of mobile networks.
The document in question aims to set wholesale tariffs (termination) of calls to reflect the direct costs, measured for mobile communications operators in Albania. So far, for setting national call termination tariffs AKEP has relied on the benchmark method of average tariffs applied in BEREC (European Electronic Communications Regulators) countries. This was done in the absence of a proper methodology for calculating the costs of the Albanian market.
According to the cost analysis prepared by the consultants contracted by AKEP for this purpose, the cost of terminating national calls has resulted in about 0.751 ALL per minute, while for international incoming calls 0.762 ALL per minute. The current termination rates in Albania are about 1.11 ALL / minute for both types of calls. To reduce these tariffs to cost, which is also AKEP’s target, call termination rates should be reduced by about 32% for national calls and 31% for international calls.
AKEP considers that this gap is important, however it predicts that the reduction of these tariffs towards cost will be done in an escalated way (glide path), because in the short term the impacts of the pandemic crisis may be significant for operators.
Based on the experience of other countries, AKEP has proposed that this process last two years, in the interval 2022-2024. According to the document, it is foreseen that the tariff for termination of calls in mobile networks will be reduced to 1.02 lek / minute next year, to 0.89 lek / minute in 2023 and finally to 0.75 lek / minute in 2024. AKEP has opened the public consultation phase which will last 30 days and after the opinions of the interested parties have been received, the final decision will be made.
Termination fees are the fees that operators pay to each other for calls made to the respective networks. For example, for every minute of a call that a user of network X makes to another network Y, today operator X pays operator Y 1.11 ALL per minute. The setting of these tariffs is the main instrument of regulation of electronic communications markets by the relevant authorities. Wholesale tariff cost orientation is considered to be the best way to enable fair and equitable competition between operators in the retail market.
The document prepared by AKEP consultants has measured the costs of wholesale services provided by mobile operators in Albania according to the Long-Run Incremental Cost methodology (LRIC). This is the basic technique used by electronic communications regulators to set cost-oriented termination rates.
/ Monitor
