Spain: CMT deregulates fixed-line subscription fees

bealtine

CMT deregulates fixed-line subscription fees Tuesday 10 March 2009


Spanish telecommunications regulator CMT has allowed Telefonica to temporarily reduce service access fees, on condition that these promotions cover the entire national territory. To prevent excessive pricing in this segment, the CMT will continue to set a maximum price each year. In addition, the regulator will continue to review the incumbent operator's promotions before their commercial launch, to prevent margin squeeze, abusive bundling and other uncompetitive practices. CMT has also decided to deregulate connection fees. The regulator considers there are sufficient market incentives for operators to reduce this fee, and proof of this are the constant promotions that offer for reduced or no subscription fee. However, similarly to the monthly access fee, subscription fee promotions will have to cover the entire Spanish territory. These obligations will only impact incumbent operator Telefonica, which controls around 80 percent of the access market. Alternative operators are free to set their own prices. In the first half of this year, the CMT is expected to set the maximum price for Telefonica's subscription fee for 2010.

Sponge Bob

bealtine wrote: »

the regulator will continue to review the incumbent operator's promotions before their commercial launch, to prevent margin squeeze, abusive bundling and other uncompetitive practices

That could not happen in ireland where "margin squeeze, abusive bundling and other uncompetitive practices" are precisely what Comreg are there to uphold

Amazing how exactly the same EU laws as Spain are bent so badly in Ireland by Comreg and eircom .

bealtine

Sponge Bob wrote: »

That could not happen in ireland where "margin squeeze, abusive bundling and other uncompetitive practices" are precisely what Comreg are there to uphold

Amazing how exactly the same EU laws as Spain are bent so badly in Ireland by Comreg and eircom .

It is finally clear what the REAL objectives of Comreg are:

“ComReg shall focus on the promotion of competition as a key objective. Where necessary, ComReg shall implement remedies which counteract or remove barriers to market entry and shall support entry by new players to the market and entry into new sectors by existing players. ComReg shall have a particular focus on:
• market share of new entrants;
• ensuring that the applicable margin attributable to a product at the
wholesale level is sufficient to promote and sustain competition;
• price level to the end user;
• competition in the fixed and mobile markets;
• the potential of alternative technology delivery platforms to support
competition.”

This was all explained by the CER recently as to mean "keeping the prices artificially high" so as to "promote competition". Total nonsense of course and even the government noticed that this regulatory goal was nonsensical and ordered prices to come down by 10%. They (government) should order a reduction of 25% in line rental "to bring us in line" with our European neighbours. The logic of the argument in the energy market applies equally to telecommunications market. Let's have real competition...now is the time to introduce it, before it is too late.

Of course they generally fail on all their key objectives anyway except keeping prices high as that particular "key objective" is solely in their own interests.
So we get limited real effective competition, little market share for "new entrants", exorbitant pricing and squashing of real "alternative infrastructure" with the likes of the NBS.

thebman

It should be much easier to force the governments hand on reducing line rental when they are doing it for Electricity prices at the moment.

If you leave it much later, the media won't pick up on the hypocrisy of saying we need more competitive electricity rates but having the highest line rental in Europe is fine and dandy and won't have any effect.

Need to get moving on it fast if you want the media to pick up on it. I'd suggest Today FM and Matt Cooper would probably give this a slot and have a history of getting politicians to come on their show.

Matt has picked up on broadband issues in the past and although didn't do a proper job on the NBS being given to 3, they are a sponsor of the show so it is understandable why he didn't want to lose his job :P

Anyway since line rental doesn't affect 3 and attacks one of their competitors, he might be more willing to give time to it. There is also no way you would not have the general public's support on the issue.