Decoding Dutch Telecom: Understanding Call Termination Regulations

The report dated 1 juni 2017 from the telecom authority in the Netherlands  (ACM) provides a comprehensive analysis of the regulatory landscape surrounding the fixed and mobile call termination markets in the country. Here is an in-depth summary of the critical points covered in the document, structured to present a clear understanding of the current state, implications of the findings, and the regulatory interventions being implemented:

1. Market Definition and Importance of Call Termination: The report delineates two primary markets within the telecom sector: fixed call termination and mobile call termination on individual networks. Call termination services are pivotal as they represent the final step in connecting a caller to the recipient within a specific network, creating a scenario where the service provider essentially operates a monopoly. Given that these services are necessary for the completion of calls, providers on whose networks these calls terminate wield significant control and influence.

2. Market Analysis and Dominance: According to the findings, each provider of call termination services on their network holds a 100% market share for calls terminating on their respective networks. The report underscores the absence of competition in these markets, highlighting structural barriers that prevent new entrants from competing effectively. This significant market power is scrutinized under regulatory frameworks to ensure that it does not stifle competition or harm consumer interests.

3. Identification of Competition Issues: The authority’s analysis identifies several potential anti-competitive practices that could arise due to the dominant position of these providers.

• • Key issues include:
    • Access Denial: Dominant providers might refuse or obstruct access to their networks for other operators, which can hinder competition.
    • Excessive Pricing: Providers with significant market power might set unreasonably high prices for call termination services, exploiting their monopoly position.
    • Margin Squeeze: Dominant operators could set prices in a way that other service providers cannot compete effectively, squeezing their margins and potentially driving them out of the market.

5. Regulatory Obligations Imposed:
   • To mitigate these identified risks and foster a competitive market environment, the telecom authority imposes several regulatory obligations on providers:
   • Access Obligations: Providers are required to ensure that other operators can connect calls to their networks. This obligation is crucial for maintaining a level playing field and allowing consumers to benefit from a range of services.
   • Tariff Regulations: The authority sets maximum charges for call termination, which are based on the actual cost of providing these services. For fixed call termination, the rate cap is set at 0.139 eurocents per minute, and for mobile call termination, it is 0.581 eurocents per minute. These caps are intended to prevent providers from charging excessive rates and ensure that pricing is fair and cost-based.
   • Transparency Requirements: Providers must disclose specific information regarding their termination rates and conditions. This requirement is aimed at ensuring transparency and enabling consumers to make informed choices.
6. Implementation and Impact: The regulations are designed to come into effect on a specified date, allowing operators and the market to adjust to the new conditions. The implementation of these regulatory measures is expected to enhance competition by lowering barriers to entry, reducing the cost of call termination, and preventing the abuse of market power. This approach is not only beneficial for other telecom operators but ultimately serves the best interest of consumers by promoting lower prices and higher quality services.
7. Consumer and Economic Considerations: The authority’s report places a strong emphasis on the economic and consumer welfare implications of its regulatory interventions. By ensuring that the call termination markets are competitive and fairly priced, the authority aims to foster an environment that supports innovation, improves service quality, and lowers prices for end-users. This proactive regulatory stance is vital in a market where technological advancements and consumer expectations continually evolve.

In conclusion, the report from the Dutch telecom authority meticulously outlines the current challenges and regulatory responses in the call termination markets. By addressing these challenges with targeted regulatory measures, the authority aims to safeguard consumer interests, promote fair competition, and ensure the sustainable development of the Netherlands’ telecommunications infrastructure. This comprehensive approach reflects a robust regulatory framework designed to adapt to and influence market dynamics positively.

Overview of MTA and FTA rates are:

access	date	rate
FTA	1-sep-13	0,00302
FTA	12-jul-17	0,00139
FTA	1-jul-21	0,00111
FTA	1-jan-22	0,0007
MTA	1-sep-13	0,01861
MTA	12-jul-17	0,0581
MTA	1-jan-22	0,055
MTA	1-jan-23	0,004
MTA	1-jan-24	0,002