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ALTO calls for lower interconnect fees
Wednesday, October 31 2001
by Matthew Clark


ALTO has urged the ODTR to investigate the current interconnection charges
Ireland's mobile operators pass on to consumers and businesses. 



According to Iarla Flynn, chairman of ALTO (Association of Licensed Telecoms
Operators) in Ireland, Digifone and Eircell Vodafone are keeping mobile phone
charges "artificially high" by charging twice as much in interconnection fees
on fixed-line to mobile calls than would be charged on mobile-to-mobile calls.
These comments were made by Flynn at the Irish Telecoms 2001 Conference in Dublin
on Wednesday.

Interconnection rates, and the interconnection market, refer to the cost incurred
by a network operator, mobile or fixed line, when transferring a call from one
network to another. 

According to the ODTR, operators designated with significant market power (SMP),
such as Eircell Vodafone and Digifone, face additional obligations aimed at
controlling the exercise of their market power. The principal obligations placed
on operators with SMP are to ensure that charges for access to another network
are "cost-oriented" and for fixed networks to provide non-discriminatory access
to the network. 

Flynn claims that the IEP0.10 per minute charged by the two operators for
fixed-line to mobile calls are not cost-oriented, particularly when compared to
the IEP0.05 that is charged for interconnection on mobile-to-mobile calls. The
IEP0.05 figure is the charge the operator places on each leg of a call from a
central switch out to both the caller and the recipient. 



"In effect, fixed line operators are being charged twice as much for their
usage of the mobile networks and are being forced to pass on this excessive cost
to their customers," he said.



He went on to say that fixed line operators are currently paying in excess of
IEP250 million per annum for calls terminating on mobile networks.  ALTO
estimates that as much as IEP125 million could be wiped off the telephone costs
of Irish business if mobile operators were forced to reduce their wholesale
charges to what ALTO considers more realistic levels. The company cited IEP0.05 a
minute as a possible realistic figure, as this is what network operators charge
their own retail customers.



But Laurence McAuley, head of regulatory affairs for Eircell Vodafone, defended
the interconnect rates it charged, saying its charges were among the lowest in
Europe. McAuley, who is also set to speak at the Irish Telecoms 2001 conference
on Thursday, said that its rates were in line with European standards and were 20
percent lower than those charged by UK operators. 



McAuley went on to say that some international telcoms use the rates Eircell
Vodafone charges in Ireland as a benchmark for appropriate costs. 



"The lack of competition in the mobile marketplace means that there was no
incentive for Digifone or Eircell Vodafone to introduce competitive pricing
structures for fixed line operators buying airtime from these companies," Flynn
commented.



Flynn also said that ALTO had made its concerns known to the ODTR and the
organisation was satisfied that its views were understood. The ODTR has listed
the issue of mobile interconnect rates on its work programme for 2001 and ALTO
has requested action without delay.  Flynn also expressed concern that the
Communications (Regulation) Bill has not been included in the Government's
Legislative Programme for the autumn.



Eircell Vodafone said it did not expect any significant change in the ODTR's
requirements and cost schemes for interconnect rates in the coming months. 

 

ALTO is the representative association of new entrant telecommunications
operators in Ireland, representing the interests of companies such as Budget,
Chorus, COLT, Cable & Wireless, Conduit, Esat, Meteor, nevadatele.com, NTL,
Swiftcall, and Worldcom.  



For more information visit: http://www.alto.ie,
http://www.eircell.ie or HREF="http://www.odtr.ie">http://www.odtr.ie