AKEP also says it is concluding an analysis on the SMS termination tariffs, which it says are currently at 7 times higher than their cost
TIRANA, Feb. 22 – Starting from next March, termination tariffs for the four mobile operators in Albania, will gradually start reducing before being halved and become equal for all four companies by September 2015, the Electronic and Postal Communications Authority (AKEP) has decided after closing public consultations.
According to the AKEP decision aimed at providing cost oriented tariffs for operators with significant market power, termination tariffs, which are fees mobile phone companies charge other carriers to terminate calls on their networks, will lower to 8.85 lek/minute for the two biggest operators AMC and Vodafone Albania, down from 10.5 lek/min currently starting from March 1, 2011.
Meanwhile, termination tariffs for third operator Eagle Mobile will drop to 10.89 lek/min, from 12.92 lek/min currently and for newly launched Albanian-owned Plus Communication to 15.92 from 18.9 lek/min currently.
AKEP also says it is concluding an analysis on the SMS termination tariffs, which it says are currently at 7 times higher than their cost. AKEP says the current termination tariff is 4 lek/SMS at a time when the cost is 0.58 lek/SMS. The Electronic Communications Authority foresees to lower these tariffs to 0.58 lek/SMS for all four operators by September 2013 starting with gradual decreases in four stages for the next two years. In September 2011, the SMS termination tariffs will be at 1.44 lek, according to recommended tariffs.
AKEP says the final decisions on these tariffs will be taken in May 2011 after a two-month consultation process and the announcement of the analysis results in the next few days.
Few weeks ago, the Electronic and Postal Communications Authority (AKEP) launched a public consultation campaign aimed at further reducing mobile phone rates in Albania.
According to AKEP, termination tariffs for the three operators it considers as having significant market power, AMC, Vodafone Albania and Eagle Mobile will be reduced to 4.57 lek/min by September 2014, down from 10.5 lek/min currently.
The decrease is expected to become effective starting from this year when termination tariffs, are expected to drop by up to 7.57 lek/min starting from September 2011.
The termination rates for the first three mobile operators will become equal only by September 2014, at 4.57 lek/min, according to the BULRAIC (Bottom- Up Long Run Average Incremental Cost) cost and service determination sample drafted by Britain’s Interconnect Communications (ICC) which was selected to develop the model in an international tender. The ICC project started in June 2009 and ended in July 2010.
According to the World Bank “The New Growth Agenda” report, mobile phone rates in Albania have dropped to below the EU average only for AMC and Eagle Mobile as of October 2009, but still remain among the highest in the region.
The World Bank said in a recent report that Albania’s current mobile termination rate is 10.5 Lek/minute or 7.61 eurocent, which is 11 percent lower than EU average of 8.55 eurocent (and lower than in 13 of the 27 EU member countries).
“Transparent, nondiscriminatory and cost-based interconnection is the single most important aspect of regulation to invigorate market competition in the ICT industry. This requires publishing and enforcing approved reference interconnection offers (RIO). RIOs of three significant market power operators have been published since February 2009, laying out interconnection tariffs until September 2010,” says the report. “These tariffs are based on EU average benchmarks. Ideally, interconnection rates should reflect long-run incremental costs to encourage investment in forward looking common facilities. Until recently the approach of the AKEP had been to regulate termination tariffs based on the EU benchmark (EU average termination rate).”
The latest data by the Electronic and Postal Communications Authority (AKEP) show the number of mobile phone subscribers at the end of July 2010 reached 4.4 million, up 5.5 percent compared to the end of 2009 and 25 percent year-on-year.
The market continued being dominated by AMC, Albania’s first operator owned by Greece’s OTE (OTEr.AT) regarding the number of subscribers, but Vodafone Albania topped the revenue table despite having fewer subscribers.
Data show Albania’s mobile penetration rate climbed to 136 percent at the end of July 2010, which is 14 percent higher than the 2009 EU average.
Albania has recently launched the 3G mobile phone service, currently offered by only one operator, and is expected to offer the mobile number portability by spring 2011.
Government’s stance
Albanian Prime Minister Sali Berisha has said his government will move this year to raise taxes for mobile phone companies and banks charging unjustifiable high fees and tariffs on Albanian consumers.
Earlier this year, Prime Minister Berisha called on Finance Minister Ridvan Bode to review the profit tax for mobile phone companies to prevent tariff abuses.
“The profit tax for each sms will be 7 to 8 times higher than currently,” said Berisha, adding that phone calls would also undergo higher taxes.
Comparing the companies to oligarchies, Berisha announced a policy of zero tolerance against them for offloading onto the Albanian customers fees and tariffs that were “too high and unjustifiable,” and threatened to impose taxes on them.
Arguing that he had expected companies to lower fees after Albania cut profit and personal income tax as well as social security contributions, Berisha said his government would not accept the fact that Albanians pay tariffs that were disproportionate vis-a-vis the market and reality in neighboring markets.
