ANCOM axes tariffs for access to local loop

Last week the National Authority for Administration and Regulation in Communications (ANCOM) ruled that tariffs for access to the local loop would be reduced to a level that is among the most competitive in the European Union. The move puts Romania third after Poland and Estonia and below the European average. The authority maintained Romtelecom’s obligation to offer access to its own infrastructure, a decision that has riled the operator.

Otilia Haraga

Regulation of access to the local loop is among the measures to promote the development of broadband electronic communications in Romania, which should have an impact on the end user. He or she will benefit from a wider range of competitive offers, including from some suppliers of voice/internet access services, Catalin Marinescu, ANCOM president, told Business Review.

The regulator proposed the application of a tariff of EUR 6.02/month for total access to the local loop, down from the existing sum of EUR 8.37/month.

Read more about

Pepco Study: Romanians spend an average of 70 lei (14 EUR) per shopping session in store

read more

“The tariff for access to the local loop agreed among ANCOM and representatives of the industry, which amounts to EUR 6.02/month, is one of the most competitive at the level of the European Union. It ranks [Romania] in third place after Poland and Estonia, and it is

below the European average of EUR 8.55/month (calculated at the level of October 2009),” says Marinescu.

The regulator has also opted to reduce shared access to EUR 3.17/month, down on the existing tariff of EUR 4.2/month.

These fees will be applied from the month after the bill comes into force. However, from January 1, 2011, shared access tariffs will fall to EUR 2.14/month and, from July 1, 2011, to EUR 1.11/month.

“If we look at the figure that will be applied in the first stage – EUR 3.17 – this positions Romania a little above the European average of EUR 2.24/month (calculated at the level of October 2009) and at a similar level to that of countries such as Bulgaria, Luxembourg, Slovakia or Slovenia,” adds the ANCOM president.

“We hope that the regulations that will soon enter into force will bring direct benefits to final users, so that the growth in competition on the segment of fixed broadband internet services is translated into better quality services at a lower price for users,” says Marinescu.

The authority maintained the obligations of Romtelecom to give access to its backbone – to the chagrin of the operator.

“We do not understand why only Romtelecom is still being regulated as far as access to the fixed broadband network is concerned, while for example, TV cable operators have well-developed broadband infrastructures. Taking these alternative networks into account, we believe there is a clear imbalance between the reality on the market and regulations, while Romtelecom is the only operator regulated in this field and while on the market there is a high level of competition among infrastructure,” Romtelecom representatives told Business Review.

On the other hand, the operator agrees that Romania will have some of the lowest tariffs in Europe.

“The 28 percent drop in total access tariffs (from EUR 8.37 to EUR 6.02) and the 73 percent drop in shared access tariffs (from EUR 4.2 to EUR 1.11) would bring about the lowest tariffs in the EU. Thus, in the case of total access, Romania would have tariffs below the EU average,” say Romtelecom representatives.

Information provided by ANCOM based on data reported by suppliers indicates that Romtelecom is the supplier with the highest degree of coverage at national level from the point of view of the networks of fixed broadband internet services.

Its population coverage amounts to 73.9 percent. Romtelecom is present in 322 urban towns, covering 11.85 million inhabitants there, and in 2,264 rural localities, reaching 4.06 million.

One of Romtelecom’s main competitors, RCS& RDS has a network that provides population coverage of 55 percent.

The operator covers 549 localities in total: 224 urban places, corresponding to 11.21 million

people, and 325 localities in rural areas, home to 640,000 inhabitants.

The other competitor, UPC Romania, has an infrastructure which covers 33.9 percent of the public. The operator’s network spans 54 localities in urban areas corresponding to 7.29 million people while in the rural areas it covers one locality that is home to 300 people. The data was calculated based on connections with speeds of at least 128 kbps.

By December 31, 2009, the authority was transmitting access codes to the local loop owned by Romtelecom from 14 companies. These codes referred to the supply of fixed communication services: broadband internet but also telephony.

To that date, 1,350 local loop circuits owned by Romtelecom had been placed at the disposal of alternative operators.

Of these, 1,070 local loops were supplied to alternative operators which had direct access, while 280 local loop circuits were opened to alternative operators with shared access.