Telekom-Control Commission fixes interconnection fees for 2000: Tariff reductions up to 40 %

Most complex procedure since opening of the market in 1998 - Per minute tariffs for peak and off-peak times - Termination fees drop by up to 30 % - Transit will be cheaper on average by 40 % - Origination tariffs lower by about 40 % - Austrian interconnection fees in European middle - Higher efficiency in the usage of POI links

Press release dated 28 March 2000

In the meeting of 27 March 2000, the Telekom-Control Commission unanimously fixed the new interconnection fees for the year 2000 which take effect retroactively per 1 January 2000. They shall be in force until 31 March 2001 and shall be re-negotiated starting 31 December 2000. The new interconnection fees are independent of the traffic volume but for the first time peak and off-peak times have been considered, so they depend on the time of day. On average the termination fees were reduced by a third, the transit and origination fees by 40 %. For services of the same kind the principle of reciprocity continues to apply, i.e. corresponding fees have to be paid in identical amounts, regardless whether a call terminates in an alternative network or the TA network.

Most complex procedure since opening of the market in 1998

"The procedure, in which all previous decisions regarding interconnection have been considered, has been the most complex and extensive since the market opened in 1998", concludes Dr. Heinrich Otruba on the completion of the procedure in his capacity as spokesman of the Telekom-Control Commission. "The decision of the Telekom-Control Commission is in line with the intention of the law and is the consistent implementation of the costing analyses. All operators using the TA network will profit from this decision. For the end customer the fixed network tariffs might thus go down further."

New: Per minute tariffs for peak and off-peak times

For tariffing purposes, peak and off-peak times as well as traffic interconnection at the regional and local levels have been distinguished. The peak times refer to calls made on weekdays, from Monday to Friday between 8 a.m. and 6 p.m. Off-peak times are from 0 a.m. till 12 p.m. on Saturdays, Sundays and public holidays as well as from 6 p.m. till 8 a.m. on weekdays.

Termination fees drop by up to 30 % (all values exclusive of VAT)

The termination fees, i.e. the costs for the delivery of a call to the network of a different operator, will be ATS 0.14 (peak) and ATS 0.07 (off-peak) for local termination. So far, the uniform rate of ATS 0.14 has been used regardless of the time of day. The tariffs for regional termination are ATS 0.21 (peak) and ATS 0.10 (off-peak) compared with ATS 0.25 until 31 Dec 1999. National termination now costs ATS 0.31 (peak) and ATS 0.12 (off-peak) compared with ATS 0.33 last year.

Transit will be cheaper on average by 40 % (all values exclusive of VAT)

The fees for regional transit were set to ATS 0.04 (peak) and 0.02 (off-peak) compared with last year's value of ATS 0.053. For national transit ATS 0.07 (peak) and ATS 0.04 (off-peak) have to be paid. Last year's fees of ATS 0.104, which did take no account of the time of day, were higher by more than 40 %. Transit is required if two networks are not directly interconnected (e.g. to enable subscribers of alternative operators to communicate). The transit network then takes over the transit function between these interconnected networks.

Origination tariffs lower by approx. 40% (all values exclusive of VAT)

For local origination, i.e. the delivery of a call from an alternative operator's network to one's own network, the tariffs are ATS 0.14 (peak) and 0.07 (off-peak) compared with ATS 0.17 last year. For regional origination ATS 0.21 (peak) and ATS 0.10 (off-peak) will be charged, which is clearly below the rate of ATS 0.28 in 1999. National origination costs ATS 0.40 (peak) and ATS 0.15 (off-peak). Last year ATS 0.55 had to be paid for this service.

Austrian interconnection fees in the European middle

The interconnection decision in Austria complies with the recommendations of the European Commission, placing Austria in the European middle, comparable with amounts fixed in the Netherlands, Spain or Italy.

"Although the new fees are slightly higher than the latest benchmarks published by the European Commission on 20 March 2000, in line with the Interconnection Ordinance (ZVO) it is neither obligatory nor legitimate in Austria to base decisions on benchmarks alone. The level of the interconnection fees is determined rather on the basis of costing analyses. Others may give estimates by means of benchmarks but we want to be precise and therefore we do some calculating! So we did not only look a the cost accounting model of Telekom Austria but developed our own analytical costing model to identify the forward-looking long run average incremental costs (FL-RAIC)", adds Otruba.

"If the average call duration in Austria of 100 seconds is taken as a basis for comparisons throughout Europe and a ranking is made from the "cheapest" to the "most expensive" country, Austria has moved up from the middle", comments Otruba on the results of the procedure. "This is the best sign that, after having heard all parties to the procedure, the Telekom-Control Commission has taken a decision on the basis of well-founded economic principles, reproducible facts and with utmost care, which will stimulate competition further".

Higher efficiency in the usage of POI links

In order to avoid bottlenecks with point-of-interconnection links in the future, e.g. too little usage, too many orders by network operators or long delivery times, the Telekom-Control Commission has ordered that extensive arrangements be made with regard to planning, provision and usage of these scarce resources. Contractual penalties in case of late delivery or too many orders shall ensure that these capacities are allocated more efficiently in future.