| 13.4°C Dublin

Vodafone battles bid to control call costs

VODAFONE has brought a legal challenge to price control decisions by the communications regulator.

IT relates to charges levied by mobile phone firms for terminating incoming mobile calls to their networks from other mobile and fixed networks.

Decisions by communications regulator, ComReg, which came into force on January 1 last, set 2.60c per minute as the maximum charge each significant market power (SMP) mobile service provider can levy for such services.

That decision, and a "more onerous" decision due to come into effect from July 1, will have a major impact on Vodafone's revenues, it is claimed.

Vodafone says its revenue for the relevant call termination services has fallen from €95.7m for the last six months of 2007 to €31.8m for the six months for the period to September 2012. A quarter cent variation in the call termination price can affect revenues by up to €4m, it said.

The case relates to a price control decision of November 2012 for mobile call voice termination (MCVT), the name given to the service where mobile companies terminate inbound voice calls on their networks.

Power

Such calls can originate from customers on other mobile and fixed networks in Ireland and abroad.

The proceedings were transferred to the Commercial Court, on the application of Niamh Hyland, for Vodafone, with consent of Paul Sreenan, for ComReg, by Mr Justice Peter Kelly yesterday.

While the price controls decision affects six other mobile operators, only Vodafone has brought a challenge to the decision. The outcome of the case will have implications for the other operators.

The action relates to price control decisions of November 21 last, made by ComReg under the relevant EC Regulations, applying to mobile service providers with significant market power.

Vodafone claims the price control decision instrument specifies that mobile phone call termination rates (MTRs) be set in accordance with Pure Long Run Incremental Cost (LRIC) methodology but no such Pure LRIC model has yet been elaborated by ComReg for Ireland.

It claims the price control decisions will affect it from this month and affect it more acutely from July 2013 when the pure LRIC benchmark for price control comes into effect.

hnews@herald.ie