Vodafone 2005 Annual Report Download - page 21

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Vodafone Netherlands reduced its rates from 20.6 to 15.5 eurocents per minute on
1 January 2004 and to 13 eurocents on 1 December 2004 and will reduce to 11.0
eurocents per minute on 1 December 2005. In addition, the NRA has commenced its
review of the Call Termination Market and proposes to find all operators as having SMP,
with remedies of cost orientation, non-discrimination and transparency.
Portugal
Portugal enacted national law implementing the new EU Framework in February 2004.
The Portuguese NRA has commenced its market reviews. Following its review of the
Call Termination Market, it found all three mobile network operators as having SMP and
it has imposed obligations on Vodafone Portugal of cost orientation, non-discrimination,
accounting separation and transparency. In February 2005, the NRA decided that
Vodafone Portugal should reduce its rates from 18.5 eurocents and 18.7 eurocents for
fixed to mobile and mobile to mobile calls respectively, to 11.0 eurocents for both by
October 2006 while a cost orientation methodology is implemented.
Vodafone Portugal has requested the renewal of its 2G licence, which is due to expire
in October 2006.
Sweden
Sweden implemented the new EU Framework in July 2003. In its review of the Call
Termination Market, the NRA concluded that all mobile network operators have SMP
and imposed obligations of cost-orientation, non-discrimination, accounting separation
and transparency. The NRA developed a LRIC Model to determine cost oriented mobile
call termination rates and proposed from July 2004, a reduction from the current rate
of SEK 1.35 to SEK 0.8 and reducing to SEK 0.54 by July 2007. Vodafone Sweden
has appealed various aspects of the decision, including the finding of SMP and the
proposed rates and has obtained an injunction suspending the proposals.
In March 2005, the NRA awarded a licence of 450 MHz spectrum for the provision of
mobile services. Vodafone Sweden challenged the proposed terms of this award.
The NRA is also reviewing the 3G coverage required to be achieved by the four 3G
licensees by 31 December 2003 (such obligations were subsequently extended to
31 December 2004). Discussions between the Government, the NRA and the
licensees are being held on these matters. The NRA has powers to fine operators for
non-compliance.
Belgium
Belgium is expected to enact national law implementing the new EU Framework during
2005. The NRA has commenced its market reviews and has commenced a process to
develop a LRIC model to assess the cost of voice call termination.
France
France implemented the new EU Framework during 2004. In its review of the Call
Termination Market, the NRA concluded that all mobile network operators have SMP
and imposed obligations of cost-orientation, non-discrimination, accounting separation
and transparency. It has set a price cap for SFR’s termination rate of 12.5 eurocents
per minute from 1 January 2005 and 9.5 eurocents from 1 January 2006. The NRA
will also commence work in 2005 to consider new price controls for the subsequent
period.
In December 2003, a French consumers association lodged a complaint with the NCA
alleging collusion amongst the three French mobile operators on SMS retail pricing.
The NRA has announced that it intends to review the market for SMS termination and
may notify this to the Commission as being a further relevant market susceptible to ex-
ante regulation.
Following the NRA’s review of the market for wholesale access and call origination on
mobile networks, the NRA has found that all three mobile network operators, including
SFR, have joint SMP in the market and it proposes access obligations as a remedy.
The decision was notified to the Commission in April and they are expected to
comment on the NRA findings in May 2005.
SFR appealed a decision by the NCA that it had abused a dominant position by price
squeezing in relation to its pricing of certain fixed-to-mobile calls to business
customers. The NCA proposed a fine of €2 million. The appeal court overturned the
NCA’s decision and the proposed fine, but the appeal court decision is subject to
further appeal.
In November 2004, SFR and the other mobile operators received a statement of
objections from the NCA relating to allegations that they engaged in practices which
restricted competition on the retail market between 2000 and 2002. SFR has
responded to the statement of objections and a hearing is expected in 2005. If the
NCA decides that there had been a breach of competition law, it would be able to
impose a fine on any operator who had committed the breach.
The French Government has agreed to extend SFR’s 2G licence until March 2021.
SFR will be required to pay an annual fee of €25 million plus 1% of 2G turnover per
annum from March 2006.
Poland
Legislation implementing the new EU Framework in Poland, which joined the EU on
1 May 2004, was enacted during 2004 and the Polish NRA has commenced its market
reviews.
The NRA has commenced a process to issue a new 2G licence and a new 3G licence.
This process is expected to be concluded in 2005.
South Africa
In September 2004, the Minister of Communications announced a number of decisions
which aim to further liberalise the telecommunications sector with effect from February
2005. These decisions include liberalising aspects of leased lines, public pay phones
and value added and resale services.
A new Convergence Bill was issued for public comment in March 2005. The Bill
makes significant changes to the licensing and regulatory framework for the
telecommunications sector. The Bill has been approved by the Government and a
consultation process is being conducted by a parliamentary committee. The Bill is
expected to be finalised before the end of 2005.
An Information Communication Technologies Black Economic Empowerment Charter
(the “Charter”) is being developed by an industry and Government joint working group
and is expected to be finalised in the second half of 2005. The Charter, in compliance
with the Broad-Based Black Empowerment Act 2003, will set targets to evaluate a
company’s contribution to Broad-Based Black Economic Empowerment. Targets will be
set in terms of equity ownership, management and control, employment, skills
development, procurement, enterprise development, and corporate social investment.
Romania
In March 2003, the NRA determined MobiFon as having SMP in the national
interconnection market under national law. From 31 December 2003 until the
development of a LRIC model, MobiFon’s mobile termination rates were reduced from
$0.11 to $0.10 per minute. In March 2005, the NRA granted a 3G licence to
MobiFon.
Switzerland
In April 2005, the Swiss NCA issued proposals to find that Swisscom Mobile has
abused a dominant position in the mobile call termination market and thereby
enhanced its position vis a vis its competitors. The NCA may seek to fine Swisscom
Mobile. A written response from Swisscom Mobile is required by June 2005.