Mobile Termination Rates (MTR) Annual Review 2017 and Draft Decision Notice

Results updated 8 Jun 2017

The Commission received two responses to consultation, from Manx Telecom (‘MT’) and Sure (Isle of Man) Ltd. (‘Sure’), and thanks respondents for their comments.

Both respondents agreed with the Commission’s proposal to maintain MTRs at 1.25 ppm from 1 May 2017 until 30 April 2018.

Sure expressed appreciation that the Commission recognises that MT and Sure have both made significant investments in 4G networks, and that there is a need for continuing investment. Sure also agreed that a requirement to undertake LRIC cost modelling for mobile would be a disproportionate burden on operators and on the Commission.

MT noted that it continues to enhance its mobile network infrastructure, but that mobile revenues are increasingly being eroded by Over the Top (OTT) applications, and there is increasing demand from customers for higher mobile speeds and enhanced network coverage. MT supports the Commission’s desire to ensure that the review of MTRs should be appropriate and proportionate. However, MT believes it would be inappropriate to overlook the output from its bottom up cost model in future when considering MTRs, because, in its view, it is possible that a benchmark approach alone could give a target rate which is lower than the cost of providing the service.

Both respondents submitted non-confidential responses to the consultation, and these are available on the Commission website.

The Commission has carefully considered views expressed by respondents.

Analysis and conclusions

The Commission notes that there is agreement with the proposals set out in the Consultation and Draft Decision Notice, such that MTRs should be maintained at 1.25 ppm from 1 May 2017 until 30 April 2018. The Commission notes MT’s view that the output from its mobile cost modelling should be taken into account in future reviews of MTRs. While the Commission accepts that the modelling output could help to inform future analysis, it reiterates its view expressed in the Consultation that the output of MT’s model would not by itself be a sufficient basis from which to derive MTRs for the Isle of Man, not least because it would not take into account Sure’s costs. Were the Commission to adopt cost modelling as the basis for setting the MTR, a separate cost model would need to be built. Such a model would need to be based on the costs incurred by a hypothetical efficient mobile operator and would need to be dimensioned using inputs from both MT and Sure. In addition it would, most likely, need to be specified on a ‘pure’ LRIC basis. The Commission does not consider that such an exercise would be proportionate.

The Commission maintains that the MTR will be 1.25ppm from 1 May 2017, for a period of one year.

Files:

• Manx Telecom response, 264.0 KB (PDF document)
• Sure response, 222.9 KB (PDF document)