Costs and Tariffs

Wholesale Tariff Regulation

Tariff control by a regulator is required wherever the absence of effective competition means tariffs may be less favourable than those which might be expected in optimum competitive market conditions. Without tariff regulation, dominant operators may price anti-competitively to restrict competition, or restrict the availability of information upon which new entrants rely in order to make informed choices when negotiating interconnection agreements. Furthermore, existing price structures may not reflect the costs of services due to a variety of historical and social factors.

Relationships exist between retail and wholesale prices, which a regulator must consider when determining, approving and regulating tariffs in order not to undermine competition, especially in a newly-liberalising market. Hence it is vital that the regulator determines and implements appropriate means of assessing the fairness of wholesale tariffs for regulated services and, if necessary, requiring amendments to these prior to granting formal approval. The ability to initiate investigations into anti-competitive pricing, to review the costs of regulated services and to ensure that providers publish clear tariffs to interconnecting networks are important tools of the effective regulator.

With its multi-skilled team of experts and extensive regulatory experience, InterConnect Communications can assist regulatory authorities in all aspects of developing and implementing an effective wholesale tariff regime. Core competencies embrace:

Reviewing existing tariff policy and guidelines;
Development and drafting of new policies and resultant legislation;
Detail recommendations for wholesale pricing controls;
Reviewing operator tariffs for compliance with regulator-approved costing methodologies;
Advising on dispute resolution between regulatory authorities and service providers.

Previous assignments include:

Performing a survey of current pricing approaches for a South-East Asian regulator and, on the basis of this, developing a recommended model consistent with international best practice to determine appropriate cost-based access and interconnection charges;
Providing technical advice for a European competition authority’s investigation into call termination charges levied by mobile operators, including the extensive modelling and analysis of the costs of running such networks from both Long Run Incremental Costing and Fully Allocated Costing perspectives;
Reviewing the origination and termination charges for international calls in an island state and comparing these with models used in other countries, with particular reference to the issues of differential termination rates for fixed and mobile traffic and the use of cost-based interconnection charges.

Key Service Areas:

Costs & Tariffs

More Information?

For more information about InterConnect's costing services, please contact Eric Tyson by phone on +44 (0) 1291 638400.