COMPETITION
COMMISSION News Release (02/09) issued by COI News Distribution
Service. 22 January 2009
The Competition
Commission's (CC) determination on price control matters in
appeals brought against Ofcom by Hutchison 3G (H3G) and British
Telecom (BT) has been published today. This determination was sent
by the CC to the Competition Appeal Tribunal (the Tribunal) on 16
January. The appeals were brought against Ofcom's March 2007
decision on wholesale mobile phone voice termination charges.
The CC's report is now available on the CC's website:
http://www.competition-commission.org.uk.
The CC was asked by the Tribunal to determine a number of
questions relating to elements of the price controls. The CC found
that two of the price control matters raised in BT's appeal
were well founded-spectrum costs and the network externality
allowance-but rejected the price control matters raised in
H3G's appeal. The full list of questions is available at: http://www.catribunal.org.uk/files/Ruling1083_85Hutch_BT180308.pdf.
As a result the CC has determined that the charges for connecting
to the O2, Orange, T-Mobile and Vodafone networks should be
reduced to 4.0 pence per minute (ppm)*(1) by 2010/11. Ofcom had
decided that they should fall to 5.1ppm by 2010/11. The CC has
also determined that the charge for connecting to the H3G network
should be reduced to 4.4ppm by 2010/11. That is 1.5ppm less than
the price control under Ofcom's decision.
*(1)2006/07 prices.
Notes to editors
1. The H3G appeal has also included
non-price control matters, which have been previously considered
by the Tribunal. The Tribunal will consider the CC's
determination before making a final ruling and giving directions
to Ofcom.
2. Mobile phone termination charges are the charges mobile
network operators charge other telephone companies for connecting
calls to their mobile networks. The appeals followed the
announcement in March 2007 by Ofcom of revised mobile termination
price controls, to replace the controls which expired on March 31
2007. See Ofcom's news release dated: http://www.ofcom.org.uk/media/news/2007/03/nr_20070327.
3. The Communications Act 2003 provides that the price control
elements of certain appeals against decisions by Ofcom must be
referred to the CC for determination. The Tribunal referred the
price control matters to the CC in March 2008.
4. The CC carried out an investigation into mobile termination
charges in 2002 following a reference by the then
telecommunications regulator, Oftel.
5. The CC is an independent public body, which carries out
investigations into mergers, markets and the regulated industries.
6. The CC's appeal group consisted of Dr Peter Davis
(Chairman), Professor John Cubbin, Carolan Dobson, Roger Davis and
Fiona Woolf CBE.
7. Enquiries should be directed to Rory Taylor or Siobhan Allen
on 020 7271 0242 (email: press@cc.gsi.gov.uk).